The “golden” contract of Attiki Odos, the crazy dividends of the shareholders, the missing findings, the bipartisan responsibilities, and the non-performance of the project to the public sector. The whole history and elements of a “sinful” case
What came out of the research:
-How did we get from Batatoudis’ plan to the lion’s convention that Simitis signed?
-The intertwining of the media Bobolas and Koutras
– How the cost of 1.3 billion exceeded 3 billion with the cost passing all to the Greek people
– How the consortium made sure to show exorbitant expenses and costs, thus reducing its net profits to a minimum.
– The labyrinthine relationships between Group subsidiaries where financial data are passed from one to the other
-How the depreciation was never achieved
From its first day of operation in 1996 until 2011, Attiki Odos S.A. had a cumulative turnover of 1.8 billion euros, but its total profit was only 64.8 million euros.
– Total toll receipts are close to 3 billion euros, but net profit after taxes is only 820 million.
– Syriza’s responsibilities and the effort to raise the price of tolls shortly before the 2019 elections
– The investigation of prosecutor Touloupakis and the comings and goings to justice without adequately investigating the “sinful” contract
– The missing report of the Ministry of Transport and Infrastructure under the Mitsotakis government
By Data Journalists
It took prosecutorial interventions, dozens of investigations, and findings to reach the conclusion…that this is a “lion” contract, which had no precedent and which is likely to never exist again.
The dance of billions that was set up around the contract and the construction of Attiki Odos concerns and will continue to concern Greek justice, the public, and Greek citizens.
Through a labyrinthine system of subsidiaries and on terms burdensome for the Greek State, the then Simitis government put its signature on the largest construction scandal in the country, while those governments that followed and tried or promised to do everything possible to return Attiki Odos to the Greek State fell on deaf ears.
Even today, the findings and the research for the most gold-bearing road in the country remain extinct…
How the project started
The inspiration for the implementation of the project, which was initially named “Elefsina – Stavros Avenue”, but in the 1980s was renamed to “Elefsina – Stavros – Spata Avenue”, was George Batatoudis, head of the construction ERGAS, known as “Batman” … both because of his surname and because of the fact that during his tenure as president of the PAOK football team, he wore a black leather coat that reached the ankles resembling the coat of the well-known cinematic hero.
G. Batatoudis said that he had the idea to unite the then-largest Greek construction companies, which had suffered from the German Hocthfief Group, as they worked on its behalf (as subcontractors) in the construction of the Eleftherios Venizelos airport in Spata, on very harsh and onerous terms, “as evidenced by manufacturers of the time.
From the evaluation, it was judged that the consortium of Attica Tollway submitted the most advantageous offer and therefore became the contractor.
The Concession Agreement for Attiki Odos was signed between the Greek State of the then Simitis government and the concession consortium in May 1996 and ratified by the Parliament by Law 2445/1996. The Minister of the Ministry for the Environment, Regional Planning, and Public Works at the time was Kostas Laliotis.
Today, the shareholding structure of the concession and operation of the road axis consists of:
“Ellaktor” 65.75%
“Avax” (formerly “J&P Avax”) 34.21% ( direct participation 24.19% and through the subsidiary ETETH 10.02%)
“Egis Projects” (French) 0.04%
How the construction cost of the project has tripled
But how was the construction of the Attiki Odos financed?
The construction cost of Attiki Odos reached 1.3 billion Euros. The State, together with the EU co-financing, put about 420 million Euros (32%), while another 670 million (52%) were state guarantees on loans of the consortium. The direct, own contribution of the consortium amounted to only 175 million Euros (13%).
However, within a few years and until the completion of its construction, the cost of construction of Attiki Odos exceeded 3 billion Euros.
A number of additional costs, which were passed through amending contracts of the original contract, boosted the budget of the project.
However, the overruns and additional costs had to be somewhat covered without increasing the cost of the flat-rate construction item (EUR 1.3 billion).
This is because the banks, which financed the project with borrowed funds (guaranteed by the Greek State), would react to any further burden of costs. The government then chose the method of additional work, revisions, and bonuses, managing to triple the cost of Attiki Odos. Indeed, because these additional projects (amounting to about one billion euros) could not receive funding from the European Investment Bank or the European Union, the cost of their construction burdened the state budget and consequently the Greek citizens.
How the depreciation was never achieved
And we come to the issue of the amortization of the funds placed for the construction of the Attiki Odos and therefore the return of the road axis to the Greek State.
How is it that since 2006 (when Attiki Odos began to distribute a dividend to its shareholders as until then the loans were repaid) and until today the 70 km road axis has collected from tolls that approach the amount of 3 billion euros and net profits after taxes that reach 820 million. Euro (see table) and the maximum return on the share capital of the concessionaire have not yet been achieved.
Here is the big scandal of the contract. According to the contract, the return on share capital is based on net profits, that is, on the difference in revenue expenses of the concessionaire and not on an easily controllable size, such as the gross revenue from tolls.
What does that mean? That the consortium made sure to show exorbitant expenses and costs, thus reducing its net profits to a minimum.
This led to years of highway maintenance costing up to $1 million Euros per kilometer for a motorway of only 70 kilometers.
Moreover, the Attiki Odos contract did not provide for any ceiling on the cost of maintenance of the motorway. So it cost… as much as the contractors wanted.
When they wanted to increase the tolls of Attiki Odos to 3.30 euros
It was June 2019 when the administration of Ellaktor under Sakis Kallitsantsis suddenly announced, a month before the national elections, that from January 1, 2020, it would increase the tolls of Attiki Odos from 2.80 euros to 3.30 euros.
The reaction from the Syriza government at the time was fierce. In a statement, the Ministry of Infrastructure said: “Some interests cannot be kept in view of the elections on July 7. Thus, they unilaterally announced an increase in the tolls of Attiki Odos on July 1st and larger increases thereafter, although an Attorney General’s Investigation is underway, which has focused on the issue of the excessive operating and maintenance costs of Attiki Odos as well as the payback time of the project, which means that Attiki Odos must return immediately to the State, possibly in 2019.
The reaction of New Democracy was also strong, with its executives talking at the time about a problematic decision that will bind the government that will emerge from the July elections.
In the end, the increase in taxes never happened.
Prosecutor’s interventions and the closing of the case
The reports about the big scandal of Attiki Odos, about the gold-bearing contract of the road axis, did not take long to flare up. The first public prosecutor’s investigation into the cost of construction and the excesses of Attiki Odos was conducted a few years after its operation, in mid-2000, by the then head of the Public Prosecutor’s Office, Dimitris Papaggelopoulos, and concerned a preliminary investigation into the construction, operation, and exploitation of the project. The case was closed despite the serious findings that it was a contract, particularly burdensome for the Greek State.
A few years later, Prosecutor Eleni Touloupaki began – following an assignment – a new investigation after reports of exceedances in the cost of construction of Attiki Odos. In 2005, she dismissed the case, describing the Attiki Odos contract as “lionlike”.
In her conclusion, Touloupaki considered that the contract, which had been ratified by law by the Parliament, was properly executed from a legal point of view, without evidence of an offense. In her conclusion, however, she noted that the revenues from the operation of the road are much higher than forecasts and underlined that the State’s control mechanisms must monitor when the investment of the manufacturers will be amortized, so that then either the tolls will be reduced or they will be partially transferred to the State.
Shortly after, however, the case of Attiki Odos came out of the drawer again. In 2009, by order of the Public Prosecutor of the Supreme Court, G. Sanidas, to the Chief Prosecutor of the Athens Court of First Instance, he requested, among other things, that the following be investigated:
– What is the contract for the construction of Attiki Odos in terms of operating time by the manufacturer and based on what calculations eg passage of how many cars etc.
– What else does it foresee if, for example, the calculations of car transit predict far fewer cars than the ones actually used today on Attiki Odos?
– Whether the terms of the contract are complied with and whether the manufacturer, on the basis of the cars used to date on the road, has covered the amount to be recovered provided for in the contract.
– Whether the Attiki Odos should be delivered to the State today or in any case in how much time.
– If the State has suffered and is suffering some damage from the use and continuation of the use of Attiki Odos by the constructor company with which it posed a series of questions. After 20 months, however, the Public Prosecutor’s Office took a decision to archive the case.
However, the Prosecutor’s Office of the Court of Appeal, which has the last word, ruled that the questions of the Supreme Court have not been answered. Thus, the Prosecutor of the Court of Appeal, Georgios Chaliassos, in disagreement with his colleague at first instance, sends back to the Prosecutor of the Court of First Instance the case file claiming “further investigation”.
The results of further research are still unknown…
