Greek parliament revives 7.6 billion euro toll road project
ATHENS Dec 11 (Reuters) - Greece approved a bill on Wednesday to unfreeze a 7.6 billion euro ($10.47 billion) toll road project, reviving what was the biggest foreign investment in the country until it was halted by the euro zone debt crisis three years ago.
The construction of four highways by joint ventures of local and foreign investors including Germany's Hochtief, France's Vinci and Spain's ACS Group began in 2008 but stalled two years later, leaving more than half of the work unfinished.
Infrastructure minister Mihalis Chrysochoidis said European Union support for the roads, which connect northwestern Greece with the southern Peloponnese peninsula, showed that confidence in Greece was returning.
"The project stopped in 2010 because no foreign bank trusted the country to put any money in it," he said. "Now they are investing 1.7 billion euros."
The road network, which is 1.2 million kilometres long, was originally financed through toll revenues, bank loans and state and EU structural funds. But Greece's economic crisis prompted banks to pull the plug and toll proceeds plunged, leading to a funding gap of about 1 billion euros.
Opening the way for construction to resume, lawmakers have approved revised terms of the four contracts that the state, a group of foreign and local banks and the builders negotiated.
"It's a bill which will create 20,000 new jobs and boost the country's GDP by 1.5 percent in the next three years," Chrysochoidis told lawmakers during a discussion of the revised contracts.
Construction has been one of the main pillars of the Greek economy but a six-year recession has hit the sector hard, with half its jobs lost since 2008 when building activity had hit a peak.
Under the new terms, banks loans will be reduced by about a half and the gap will be covered by EU structural funds and loans from the European Investment Bank. An initial 30-year concession could be extended by three years to 2040, to make up for a 60 percent drop in expected toll revenues compared to the initial assumptions. ($1 = 0.7261 euros) (Editing by Jane Merriman)