- – Large construction groups no longer want to undertake the construction and operation of units through PPPs, but to have full control over the collection and transport of waste instead of the Municipalities and the Regions.
- – From 2024, the terms of the European funding of waste treatment projects will change and the local authorities will have to dig deep into their pockets.
- – Greece continues to bury 77.7% of the waste, more than triple the EU average, which has set a target of falling below 10% in 2035.
- – In waste recycling, Greece is stuck at 21% while the EU target is 55% in 2025.
- -The waterloo with the recycling plants and the golden trick with the “houses”.
- – Why in the Region of Sterea Ellada, every procedure for the inclusion in a funding program of public projects that had been planned for many years for the treatment of waste in Chalkida, Lamia, and Amfissa ‘froze’?
By Aris Hadjigeorgiou
Dozens of projects related to the management of waste nationwide, which remained frozen in the first four years term of 2019-2023 are planned to start next year on different conditions, thus opening “new businesses” that can reach a turnover of 5 billion euros. The new landscape in the field of municipal waste where Greece records over time – and not accidentally – very low performance, is mainly shaped by two facts:
Firstly, the fact that from 2024 the terms of the European funding of waste treatment projects will change and the local authorities will have to put their hands deep in their pockets. Secondly, the intention of large construction groups not only to undertake, through a PPP, the construction and operation of Waste Treatment Plants, Biowaste Treatment Plants, Landfills, and Urban Recycling Infrastructures but also to have full control over the collection and transport of waste instead of the municipalities and the regions.
These new data dovetail with the desire of the Mitsotakis government to pave the way for private entities to operate in areas that until now were considered public service. However, they are also exploiting a situation that has been characterized for decades by a long delay, with Greece paying fines for uncontrolled landfills, failing to meet recycling targets, sending incorrect data, on the basis of which subsidies are collected and losing tens of millions of euros from co-financed projects announced but not implemented:
- Indicative of the situation are those mentioned in a text issued last week (8/6/23) by the Commission as an “early warning report” to Greece. There, it is recorded that our country continues to bury 77.7% of its waste, which is more than three times the average in the European Union, which has set a target to fall below 10% in 2035. In waste recycling, Greece is stuck at 21% while the EU target is 55% in 2025. As reported, Greece’s performance has barely improved since 2015. At the same time, the Commission leaves clear hints for “tampered data” as it states that while in the annual per capita production of municipal waste Greece with 524 kg is above the European average (501 kg), in packaging waste is with 81 kg well below Europe (177 kg).
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>The case of recycling, instead of becoming a measure to reduce waste buried and save resources to protect the environment, has often taken on the characteristics of an organized circuit that simply distributes resources and subsidies. On Sunday, after the recent elections, another fire broke out at a waste recycling plant in Aspropyrgos. It is estimated that since 2014 more than 30 “recycling plants” have been set on fire, scattering tons of toxic gases into the atmosphere and at the same time eliminating traces of any possible poaching that may have been done with statements of materials that were supposedly recycled but in fact, they were accumulated uncontrollably.
>Unfortunately, the recycling centers followed the way of “cleaning up” and illegal landfills. Greece continues to pay a six-monthly fine of 3.6 million for the operation of 42 illegal landfills that are still in operation or closed but have not been restored. The first fines from the European Court of Justice were given in 2005 for 1125 landfills and more than 60 million euros have since been paid. Despite this, 42 more remain, and there are fears that if PPPs and privatization take place with costs rising excessively, a new second generation of landfills will be created by municipalities unable to pay for a possible increase in disposal costs from €50 to €250.
>One of the first actions of the Mitsotakis government in the past four years was to excessively advertise the “recycling houses”, for which the Commission announced on 8/6/23 the “freezing” of European funds amounting to 92 million euros. This amount was intended for the purchase of this equipment in huge numbers that had begun to continuously buy municipalities and regions and even with an excessively high cost that reaches 350,000 euros per “house”.
Frozen auctions-fundings
While municipalities and regions were rushing to get “recycling houses” and the government to approve funding, this was not the case in the past four years with the “big projects” that waste management requires.
The government started by summarily amending the National Waste Management Plan (NWMP) in 2020. The Plan is based on the dispersal throughout Greece of dozens of Waste and Bio-waste Treatment Units. However, the aim is through the processing to produce “combustible material” that is either promoted for energy production or burned in cement plants. Theoretically, of all the waste, a part of it will be recycled (paper, glass, metals, textiles, wood, and other so-called ‘streams’ for which municipalities have to organize collection points) and the rest will be processed. There, however, the fuel will be produced, which is different if it has to go to the production of cement and of different quality if it will go to energy production. This is where the new “tricks” based on the old “sins” begin:
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The “enthusiasm” that was cultivated at the beginning of the previous government term was not confirmed by the developments. In 2020 there was a series of announcements: for 17 processing plants, with a budget of 700 million euros to be done as public works. For the three large PPPs (two in Attica and one in Central Macedonia) with a budget exceeding 1 billion euros. For 14 Bio-waste Treatment Units. For three to four waste incineration plants with a construction cost of more than EUR 800 million.
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Despite the fact that in this particular four-year term there was no substantial opposition presence, very few of the above projects proceeded to actual implementation. Many Waste Treatment Plants were included in funding, and several were auctioned but no assignments were made to start disbursements before the YMEPERAA (Transport, Environment, and Sustainable Development Infrastructure) funding program expires at the end of 2023. The big PPPs are stuck in the Competitive Dialogue. Combustion plants are also waiting for the smoke to “emerge” from Maximos Mansion as a dispute rages between cement and energy entrepreneurs interested in the same material.
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In some cases, such as that of the Region of Central Greece, any procedure for the inclusion in a financial program of public works that had been planned for many years for the treatment of waste in Chalkida, Lamia, and Amfissa has been “frozen”. Last January, an internal document was leaked by the director general of the Solid Waste Management Organizations (FODSA), Charalambos Tsokanis, who warned of the loss of 112 million euros of European funds because the government does not include the projects in funding and suggested to the mayors to appeal to the prosecution authorities.
Finally, in March, the mayors appealed to the then Minister of Development, Adonis Georgiadis. After the meeting, Georgiadis said that the integration of the three projects would take place immediately – something that did not happen. Apparently, the view of another government official, Manolis Grafakos, General Secretary of Waste Management at the Ministry of Environment and Energy, prevailed. Mr. Grafakos has long stated that no more WTPs will be included as public works and that there will also be a PPP for Central Greece. This Secretary is considered a man of the “close environment” of Kyriakos Mitsotakis who even put him in charge of the election campaign of New Democracy in Central Greece. He was so sure of the… distress of the mayors of the area that the works would not proceed…
Burial of waste pass
Municipalities are protesting, not only because in some cases they have no space to dispose of their waste, but also because they are under financial pressure from the government not to bury them in the Sanitary Landfills without treatment. The government even introduced an additional “burial fee” for the waste buried, starting from 30 euros per tonne with the prospect of reaching 55 euros. The application of the fee, however, after various postponements, was also “frozen” and the government decided in an amendment last April to pay the corresponding amount of 60 million from the state budget to avoid electoral disruptions.
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Entry of private entities through FODSA
However, there were threats of riots at some point with the mayors and other reasons related to the subject of this report, namely the entry of private investors into waste management. This entry is no longer sought through PPPs but through the sale of a stake of up to 49% of the Management Bodies (FODSA) operating throughout Greece and in which the municipalities have the first say (except for Attica, where the Region is in charge of the EDSNA).
Last November, a new amendment to the National Waste Management Plan was initiated and then a proposal was submitted to the Central Union of Municipalities of Greece, in which it was stressed that “it is foreseen, in the form of a threat, that if FODSA does not comply with the obligation to cooperate with private investors in the direction of waste incineration, then the state will deprive the Local Authorities of the responsibility for the management of municipal waste and will assign it directly to private investors, even if FOSDA and the local communities disagree, at the absolute uncontrolled discretion of the Ministry of Environment”.
As part of the report you are reading today, however, those mayors who were questioned again replied that there is no longer an issue. Does the outcome of the recent election play a role? No, the mayors insist and argue that the concerns at the time were about the privatization of water denied by the government pre-election.
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The New Regulatory Authority
It is recalled that the debate on the privatization of water erupted on the occasion of the establishment of the new Regulatory Authority for Waste, Energy, and Water. This principle is an evolution of the Regulatory Authority for Energy which, after having succeeded “perfectly” with the energy market, now undertakes to regulate the “markets” of waste and water. However, regulation is not possible when there is a monopoly on a market. It has been years since the Regulatory Authority for Energy was founded in 1999 until the then monopoly of DEI was broken, but common sense says that once there is a “regulator”, developments will take place.
If, however, the privatization of water and the liberalization of its market have been subject to government denials, this has not been the case with the municipal waste market. On the contrary, as long as public works do not proceed, the need to proceed with the necessary infrastructure with the contribution of private entities is reinforced.
On waste management, Public-Private Partnerships (PPPs) have been attempted for several years and have led after several adventures to Processing Units in Western Macedonia (DIADYMA), Epirus, Ilia, Serres, and the Peloponnese. On the contrary, they did not bear fruit in Attica when they were attempted in the middle of memoranda and after the fierce reactions in Keratea in the years 2011 and 2012.
Now they are trying again but, as we mentioned above, without having led to a practical result. The first PPPs were dominated by the companies AKTOR of the then Bobolas and TERNA group, while smaller projects were undertaken by AVAX and INTRAKAT. In the new PPPs TERNA has declared interest jointly with TITAN cement company, INTRAKAT in partnership with AGET-Lafarge and interest have expressed without a joint venture cement industry three more schemes: Motor Oil-AVAX-Thalis, Mytilineos-Mediterranean, and Helector-Actor Concessions. These schemes have been known since the beginning of 2022, but since then, cosmogonic changes have taken place, dominated by the dynamic movements of the Vardinoyannis Group (towards Aktor and Thalis) and the entry of the shipowners Baku-Kaymenakis into INTRAKAT.
Could these changes have caused the projects to “freeze”? Obviously, but it wasn’t the only reason. It is characteristic that in the case of Attica, there is an auction for WTPs of a huge capacity of 450,000 tons in the Central Sector where there is not even an announced location, ie the investor does not know where the plant will be established. On the contrary, in the case of the other WTP in Schisto, the assignment could have proceeded. But the “invisible hand” of the market postponed the decision until later after the elections.
Indicative is what happened with the smallest WTP in Grammatiko that had started to be auctioned not as a PPP but as a public project with a budget of 138 million euros. For a year now, the assignment has been “frozen” after a long period of judicial and pre-trial appeals of the schemes that were initially excluded (TERNA – INTRAKAT, AVAX) and the offer of the consortium HELECTOR (AKTOR)-Mediterranean had been accepted as the only one.
The 5 billion-euro pie
It may cost citizens something more through municipal fees, but waste projects are of great interest because they are related to the everyday life of all citizens. According to current data, it is estimated that municipalities spend about 2 billion annually on the collection, transport, and disposal of waste in landfills.
This amount can be reduced if the landfills disappear but the costs will be compensated by the necessary recycling projects in the cities.
At least three new large pieces are added to the new “pie”:
- – Major PPP projects worth more than €1 billion
- – Public works (another 1 billion) that will not start in 2023 and will have to be re-tendered.
- – The waste incineration plants, where if the “big scheme” prevails (more than three units) and the view for everything to be directed to the cement industries does not pass, the cost will exceed 800 million euros.
Until now, the government has been of the opinion that all of the above can be carried forward by PPP and this is in line with the wishes of some of the business groups. Recently, however, the idea has been promoted, instead of PPPs, to take over the FODSA privately in cooperation with the manufacturers who will take 49%, and the management. Here we need to secure the consent of municipalities that the government does not seem to be concerned about. Perhaps the government is concerned about the power that private entities will gain as they will control the entire circuit by collecting even municipal fees or even shaping them, as is the case with private electricity providers. With PPPs, on the other hand, the government guarantees minimum revenues for manufacturers and thus also has to secure resources through municipal fees. The game will continue to “thicken” after the elections and for as long as the citizens will have money to pay municipal fees.
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