When September 2024 ended, Greece was already ranked 2nd worldwide in the best tender procedures via PPPs according to the World Bank’s «Benchmarking Infrastructure Development 2024» Report. Competition levels, Value for Money (VfM) and transparency are amongst the criteria taken into consideration. This distinction is no surprise. It comes after 2020 when Greece had also ranked 2nd worldwide by the World Bank, and after 2019 when the Global Infrastructure Hub (GIH), a G-20 Initiative established to advance its infrastructure agenda, also ranked Greece 2nd among 81 countries in the field of PPPs Procurement.
The Role of PPPs in Greece's Transformation
There is no doubt that PPPs have transformed Greece. The 37 Projects approved as PPPs since 2019 would have simply not happened taking into consideration the debt burden of Greece and the Covid era which worsened, even more, the Country’s fiscal conditions. The sectors mostly benefitted by PPPs are the educational, health and judicial sector where a significant number of schools, student accommodations and courts have been prepared / matured / procured / developed / implemented as PPPs, as well as the Waste Processing Units since Greece has the lowest performance in the EU as far as waste process is concerned. Τhe last couple of years a few Road Projects have been procured as PPPs. Furthermore, the Ministry of Agriculture and Food capitalized upon the granting by the EC of the RRF funds and prepared a portfolio of Irrigation PPP Projects which are being procured. Worth saying that PLANET S.A. is the Leader of the Legal – Financial – Technical – E&S Advisors for the maturing and tendering of the “Minagiotiko Dam and Irrigation Network” PPP Project, the first Dam being procured as a PPP in Greece.
Indeed, sustainability challenges constitute a major driver of future PPPs in Greece given the catastrophic fires and floods of the last years. Floods prevention is a significant reason for the Dam PPP Projects portfolio maturing by the Ministry of Infrastructure and Transport. At the same time, Greece is a pioneer for decarbonization initiatives since it was heavily dependent on carbon fuels, and specifically coal. The Just Transition Fund seeks to address the socio-economic challenges arise from decarbonisation, and the PPPs could be used as development tool. PLANET S.A. is proud to contribute towards Greece’s goals and targets relevant to decarbonisation.
Infrastructure developed not as a PPP also needs routine and major maintenance. Public funding is scarce, thus, the maintenance - both routine and major - of major assets, as well as their technical management and operation could also constitute part of the PPP scoping. A year ago, the Operations & Maintenance PPP Contract was signed for Thessaloniki Metro for a 12-year term. This constitutes the first PPP Management Contract in Greece and could show the way for more Management or Service PPP Contracts to be implemented.
These perspectives will be enhanced by the fact that in 2023, Greece regained the investment-grade status for the Hellenic Republic's credit rating by both S&P and Fitch. This will make a significant difference to the PPP market since it will allow Greece to be in the radar of worldwide commercial banks and investment funds which will increase their appetite to lend to domestic Contractors.
New Challenges and Limitations for PPPs in Greece
Nevertheless, there has been a recent lull in PPP activity in Greece since the Approval of PPP Projects by the PPP Interministerial Committee which had surged during 2019 – 2023 has been interrupted. As a matter of fact, the last approved PPP Project is the New Thessaloniki Cancer Treatment Hospital (August 2024), the only one in 2024 after the Relocation of Korydallos Prison Facilities was approved in May 2023. Due to the growth driver of the PPPs, a few years ago their cap stopped being related to the Public Investment Programme (PIP) available funds but was directly connected to the GDP where the total Availability Payments must not exceed the 0,24% of the Greece GDP. This threshold has been reached, thus, the PPP Projects pipeline is not expected to be much expanded till 2029. In fact, the Greek Deputy Minister of Transport and Infrastructure, responsible for Infrastructure, Nikos Tachiaos, was quoted saying
...the contribution of ΡΡΡ to the construction of major projects is significant, as they achieve both construction and long-term maintenance over decades. However, they do not constitute an inexhaustible financial tool.
It seems that the Availability Payments scheme for the Greece PPP Projects reached its limit.
