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The subway in Thessaloniki - back in a deadlock

14 October 2012 / 15:10:46  GRReporter
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The Ministry of Environment, Physical Planning and Public Works is seeking a solution in order to accelerate the removal of obstacles and for the subway building works to continue. Meanwhile, the future of AEGEK - the company heading the consortium which is constructing the subway - is unknown. The company is practically in the hands of its creditors, and there is information that it is close to selling.

According to sources from the consortium, the situation of the subway in Thessaloniki is even more dramatic than it seems, because its construction cannot continue without additional funding. It is noted that the contractor's requirements are not met by the prepayment, and so far the project is losing and therefore impracticable.

It becomes clear that the digging machines are buried into the ground at Analipsis station and are close to complete destruction. Furthermore, the archaeological excavations have been carried out only in certain areas, and not along the entire route. This means that over time archaeologists will need to excavate the land further. Sources from the company note that the project is at the centre of political games, and so far nothing is heard about the solution of the problem, although an immediate political decision is necessary.

On Friday, the consortium's manager Michalis Simas said publicly that they are unable to finance the project. According to him, the main reasons are the delay of the construction because of the excavations, the delay of land expropriation, as a result of which the company has encountered previously unknown obstacles. Therefore, the technical characteristics of 9 out of 13 stations had to be changed. As for the archaeological excavations, the seven months stated in the contract had to become seven years, so that the land could be transferred. Also, up to now, the cost of studies has reached 90 million euro.

One of the solutions is to create a "troika" with the consortium, the Ministry and the Athenian Subway, as well as the European Investment Bank (EIB), which will unblock the problems and the liabilities. According to Stratos Simopoulos, General Secretary of Public Works, the subway can be completed by 2017, if the contractor's economic problems are solved. Non-execution of the construction is out of the question, because its financing is secured. Simopoulos noted that the subway's completion is a primary task for the government.

According to Christos Tsitouras, managing director of the Athenian Subway, ever since the announcement of the tender for the subway it has been known that the tender is about research and construction. The consortium was aware of this when it took part in the auction, and when it signed the contract. Therefore, all knew that this project would experience great difficulties during its implementation. Tsitouras also stressed that because of the delay, the budget for archaeological research has exceeded the initial plan by 40 million and now reaches 90 million. Three years have also been lost because of land expropriation.

Moreover, the places which were ready in 2006 and were selected for stations, appeared not to be the most appropriate and had to be moved in 2009. However, Tsitouras expressed optimism about the final outcome, noting that they have started work on Analipsis and Agias Sofias which are the most difficult stations because there is not enough space. According to him, the price of the Thessaloniki subway is 85 million euro per kilometre and it is lower than that of the Athenian subway, which was 115 million. And once expropriations are completed and technical differences are solved, provided there is regular funding, the subway can be completed by 2016.

According to sources of To Vima newspaper, the company AEGEK is controlled in practice by Alpha Bank, after the bank provided a loan of 25 million euro. The company has partially paid its duties to employees and suppliers with the help of this loan. There are also rumours about an interest in buying AEGEK. If this happens, the buyer will receive a significant portfolio of major projects, such as the Thessaloniki subway, the road from Agia Saranda to the Greek-Albanian border, the road Aktio-Amvrakia, the part of the new railway line in the Peloponnese between Rododafni and Kiato and many more.

Tags: Subway Thessaloniki AEGEK
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