- From 2019 until the collapse of the project, there were three tenders, several
extensions, and the budget skyrocketed to €280.1 million from the €100 million
estimated in the first tender, while the original estimate provided by the Deputy
Minister of Development was €50-60 million. - Mitsotakis at the Thessaloniki International Fair (TIF): “We have found that there is
insufficient market interest for such a project. Therefore, we will transform the CHROPEI
project into a major social housing initiative”.
by Data Journalists
It was May 2023 when the Data Journalists, in an extensive report, revealed that the much-
hyped government project to develop the iconic 18-acre CHROPEI property in the heart of
Athens and turn it into an Innovation State modeled after Silicon Valley was nothing more
than a utopia.
Το βατερλό της ΧΡΩΠΕΙ και οι περίεργες αλλαγές στον διαγωνισμό
Sixteen months later, at the Thessaloniki International Fair (TIF), Kyriakos Mitsotakis put an
end to the much-publicized project. There was supposed to be a technology park at
CHROPEI. “We realized that there was little interest from the market for such a thing.
Therefore, we will turn the CHROPEI project into a large social housing initiative,” the Prime
Minister said during the press conference.
The property, which has a high building coefficient, will be transformed into a significant
residential project, something that construction groups are very interested in, with the
creation of 300 apartments. Some will be kept by the developer, while the rest will be
handed over to the state to be rented out at lower rates.
Minister of State Akis Skertsos confirmed that CHROPEI is not the only dormant public
property with such potential. According to Mr. Skertsos, at least ten similar properties in
Attica and the rest of Greece have already been evaluated and will enter a development
process similar to that of CHROPEI. The plan is to invite private developers to submit
proposals for the construction of new homes. The CHROPEI project is expected to be
completed by 2027, eight years after the initial discussion on the development of the site
began.
How the creation of the Greek Silicon Valley remained on paper
The story of the CHROPEI development project began in December 2019. Over the past five
years, there have been three tenders, numerous extensions, and the project’s budget has
skyrocketed to €280.1 million from the €100 million estimated in the first tender, and from
the €50-60 million initially projected by Christos Dimas, the then Deputy Minister of
Development and current Deputy Minister of Economy and Finance. In addition to the
budget increase, there has also been an extension of the land concession period. Initially set
at 30 years, it was extended to 45 years, then further extended to 95 years through an
amendment submitted by the Ministry of Development and approved by Parliament.
However, the latest tender invitation specifies that the duration of the partnership contract
will be 90 years from the signing date. The reason for this time extension was decided
because, as noted in the explanatory report, the investment would not have been viable
within the existing 45-year timeframe. This follows a series of project “failures” and
extensions of the tenders issued for the property’s development.
However, the problems with this particular project seemed endless. The most recent tender
received two extensions after requests from the companies interested in undertaking the
project.
However, the biggest issue, beyond all the other problems, is that this ambitious
project—into which the government has invested significantly, primarily to create an
impression—seems to have failed to attract even those who were considering investing.
“The timing is difficult”, said an executive from one of the companies that expressed
interest in the first tender. The companies that had shown interest in the first tender were
GEK Terna, Dimand, AKTOR Concessions, and the Intrakat-Intracom Holdings consortium.
But he wasn’t the only one with reservations about the ambitious project. Suddenly, while
there was plenty of money available for startups, things have tightened recently, and the
risk is high, especially considering that in the capital there are already places that can host
startups, such as Demokritos, said another source who will be involved with the project, as
they will be one of the sources funding the whole venture, if and when the process is
completed. “The timing is difficult, and it’s true that there are other buildings offering what
CHROPEI aspires to provide, where there is already an ecosystem of companies,” he added
pointedly.
One change since the original announcement is that the investor undertaking the project
was permitted to use part of the allowable building coefficient to develop housing
complexes, not only for third parties but also for users of the Innovation State’s
infrastructure, as clarified by government sources.
Another change was the possibility of involving the European Investment Bank (EIB) in the
project’s financing, starting from the phase of drafting and submitting bids by interested
investors. Two investment groups had already approached the EIB regarding potential
financing.
The prime CHROPEI property covers a total land area of 17,893 square meters, which
includes an industrial complex of listed buildings. The government’s ambitious goal was to
develop 35,700 square meters, with the renovated facilities expected to employ more than
2,400 workers. As stated on the website of the General Secretariat for Research and
Technology, the site was intended to host R&D departments of large companies, Startups,
Spin-Offs, Incubators, Accelerators, and Research Centers.
(EUROKINISSI )
THE TIMELINE AND WHAT CHANGED IN 5 YEARS
DECEMBER 9, 2019: It is announced that, by decision of the Deputy Minister of Development and Investments, Christos Dimas, the property is transferred from the National Organization for Medicines, to which it belongs and is overseen by the Ministry of Health, to the Ministry of Development and Investments in order to proceed with the investment process.
APRIL 3, 2020: The Interministerial Committee on Public-Private Partnerships (PPP) approves the Innovation Center project, with a budget of €60 million. The Ministry of Development announces that this is one of the most important projects and that its creation will mark Greece’s return to the map of competitiveness and its upgrade in international innovation rankings.
NOVEMBER 9, 2020: The “Topographic Survey of the CHROPEI site and its surrounding area on Piraeus Street, in Neo Faliro, Attica” is approved and assigned to the company ANK TECHNICAL CONSULTANTS, according to a decision signed by the General Secretary for Research and Technology, Athanasios Kyriazis.
NOVEMBER 23, 2020: The Central Council for Architecture (KESA) discusses and sets the supplementary specific terms and building restrictions for the listed industrial complex of CHROPEI buildings, located in the Neo Faliro Municipal Unit, Piraeus, for the development of the property through the “Creation of an Innovation Center in Athens” project under a public-private partnership (PPP) in accordance with Law 3389/2005.
DECEMBER 7, 2020: In an interview, Deputy Minister of Development Christos Dimas states that the project’s budget could reach €80 million. He also mentions that the property will be leased for 30 years to the investor, who will be responsible for designing, constructing, and managing the facilities, while providing a portion of the annual revenue to the state, which is granting the land.
DECEMBER 7, 2020: The Invitation for Expressions of Interest for the “Creation of an Innovation Center in Athens through a PPP” is launched for public consultation on the website of the General Secretariat for Research and Technology. This marks the first phase of the tender, seeking a private partnership entity that will undertake the creation and later management of the first Innovation State on the 17,893 square meter CHROPEI site, formerly a factory. According to the PPP study and business plan, the investment was estimated at €100 million, and 2,000 jobs were expected to be created. (http://www.gsrt.gr/central.aspx?sId=108I334I1180I323I445295&olID=777&neID=673&neTa=16_40762_1&ncID=0&neHC=0&tbid=0&lrID=2&oldUIID=aI777I0I119I428I1089I0I3&actionID=load&JScript=1)
JANUARY 21, 2020: The first international competition is announced using the competitive dialogue process for awarding the Public-Private Partnership (PPP) contract for the project “Creation of an Innovation Center in Athens through PPP.” The deadline for submitting the Expression of Interest is set for April 19, 2021, at 1:00 PM (Greek time). The duration of the PPP contract is set at a minimum of 30 years, with the possibility of an additional 15-year extension.
(https://gsri.gov.gr/dienergeia-dimosiou-diethnous-diagonismou-me-ti-diadikasia-tou-antagonistikou-dialogou-gia-tin-anathesi-symvasis-sybraxis-dimosiou-kai-idiotikou-tomea-tou-ergou-dimiourgia-kentrou-kainotomias-st-2/)
DECEMBER 30, 2020: Prime Minister Kyriakos Mitsotakis visits the abandoned 17,893 square meter property at the old CHROPEI factory.
JANUARY 22, 2021: In an interview, Deputy Minister of Development Christos Dimas states that “the competition is ongoing and there seems to be interest from outside Greece for the creation of the first Innovation State, which is why we proceeded with translating it into English.”
APRIL 19, 2021: Four parties submit bids. According to reports, these are the GEK Terna Group, Ellaktor Group, Dimand, and Intrasoft.
MAY 8, 2022: Deputy Minister of Development and Investments Christos Dimas states in an interview with the Athens-Macedonian News Agency (AMNA) that a contractor for the creation and operation of the first Innovation State is expected to be announced in a few months.
MAY 19, 2021: By decision of Deputy Minister N. Tagaras, the following is permitted for the listed industrial complex “CHROPEI”:
The creation of an “Innovation Center – Model Research and Technology Park” with the distinctive title “Innovation Center” across the entire building complex of the property.
The utilization and/or reconfiguration of the original building shells, where necessary.
The construction of new buildings within the property and the addition of new volumes, as extensions or upwards, to the preserved structures.
The creation of open spaces within the property, with the necessary adjustments to support its operation.
SEPTEMBER 24, 2022: In new statements to AMNA, Deputy Minister of Development and Investments Christos Dimas mentions that binding offers for the public international competition to create the first Innovation State are expected in three months.
OCTOBER 11, 2022: By decision of the General Director of Environmental Policy at the Ministry of Environment and Energy (YPEN), K. Dimopoulos, environmental approval is granted for the Special Urban Plan (SUP) for the creation of an Innovation Center – Model Research and Technology Park at the former CHROPEI Industrial Complex. The submission of binding offers is anticipated for December.
JANUARY 27, 2023: A new competition is announced with more than double the initial budget. The estimated value of the Public-Private Partnership (PPP) contract, in net terms, increases to €230 million, with public participation now projected at €18.75 million, in addition to private investment. The disbursement of the Public Financial Contribution, with a maximum budget of €18,750,000, will be made in installments according to Article 7, Paragraph 3 of the General Block Exemption Regulation, based on the progress of the Project, as specifically defined in the PPP Agreement. This maximum amount of Public Financial Contribution is calculated in accordance with Article 2, Point 20, and Article 4, Paragraph 1(a) of the General Block Exemption Regulation and arises from the application of the aid intensity (based on the Regional Aid Map) to the eligible budget, which may only cover tangible and intangible fixed assets, to cover a percentage of eligible initial investment costs for new economic activities, as specified by the Applicant in the corresponding document of Folder III – Financial Offer. These provisions are granted subject to the conditions outlined in Article 14, Paragraph 13 of the General Block Exemption Regulation.
The deadline for submitting binding financial offers is set for March 28, 2023, at 1:00 PM (Greek time), while the duration of the PPP Agreement is set at 45 years from the Date of Signing. (https://gsri.gov.gr/anoichtos-dimosios-diethnis-diagonismos-gia-tin-anathesi-symvasis-sybraxis-tou-ergou-dimiourgia-kentrou-kainotomias-stin-athina-me-s-d-i-t/)
MARCH 31, 2023: The lease term for the CHROPEI property from the National Organization for Medicines (EOF) to the Greek State is extended from 45 to 95 years. This extension is stipulated by an amendment from the Ministry of Development, which has been submitted to Parliament. The property is designated for the establishment of the first research, technology, and innovation park in Athens. The extension is necessitated because, as noted in the explanatory report, the investment would not be viable within the original 45-year timeframe. This decision follows previous failures and extensions of tenders for the property’s utilization. According to the latest competition document, the duration of the Public-Private Partnership (PPP) Agreement is set at 90 years from the Date of Signing.
APRIL 17, 2023: A new competition is announced with changes both in the budget and the duration of the lease. The estimated value of the PPP contract in net present value terms is increased to €280,100,000 excluding VAT, up from the initial estimate of €100 million. Initially, it was anticipated that the contractor would start constructing the country’s first Innovation District by early 2022, approximately a year and a half ago (https://gsri.gov.gr/anoichtos-dimosios-diethnis-diagonismos-gia-tin-anathesi-symvasis-sybraxis-tou-ergou-dimiourgia-kentrou-kainotomias-stin-athina-me-s-d-i-t-2/).
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