PPPs are a 'key pillar' in Greece’s economic development

Thursday, February 12, 2009

Greece's finance minister, George Alogoskoufis, explains how his country is embracing the Public Private Partnership sector and how he sees it becoming a key part of Greece's future development and growth

The Greek Government has been implementing an extensive reform agenda that has begun to bear fruit in the form of improved public finances, solid growth, strong private investment, rising exports and declining unemployment rates. Against this background, a new legal framework for Public Private Partnerships was introduced in 2005 as an integral part of the agenda.

With PPPs the Greek administration aims to boost economic growth whilst reducing the state's involvement in the economy and improving social cohesion and living standards. The objective of PPPs is to accelerate the completion of infrastructure projects with significant benefits for the Greek society and minimal impact on the state budget.

Despite some initial reservations about the reform, good practice has helped change perceptions. On a daily basis, dozens of institutions across the country are getting in touch with the Special Secretariat for PPPs to become involved in a wide range of projects. In the case of regional development in particular, PPPs can help complete vital projects.

So far, the progress of PPP projects in Greece has clearly demonstrated their enormous potential. Greek public authorities have come to realise the benefits and opportunities arising from the careful design and implementation of PPPs and acknowledge the fact that such partnerships can contribute to the faster provision of infrastructure and better quality services to citizens. In addition, it is evident that the private sector views PPPs as a promising new field for business activity. The approval of a significant number of PPP projects across different sectors creates significant investment opportunities that stimulate the interest of many firms.

In particular, the participation of many well established foreign companies in the tenders of the first pilot PPP projects demonstrates the confidence they have in the potential of the Greek PPP market – a broad market supported by a new and effective legislative framework as well as swift and transparent procedures.

A total of 34 projects representing an overall investment of €4bn have already been approved since March 2006, when the PPP Inter-ministerial Committee was established. These projects fall into different sectors of the economy ranging from education and health to waste management, public authority infrastructure needs, tourism and sports. More than 40 Greek and foreign companies have participated in the respective tenders, which attests to the keen interest of the Greek and international market in Greek PPP opportunities.

One should also note the role played by Greek PPPs in spreading the word throughout South East Europe, the Mediterranean and the Middle East. Executives from neighbouring countries – including Egypt, Cyprus and Jordan – have been visiting Greece to get an idea of how the partnership schemes work. At the same time, countries such as Croatia, Serbia and Latvia have expressed strong interest in the projects. This cross-border development could help Greek companies now active in the field of PPPs to expand into new markets.

PPPs constitute an important reform that will significantly contribute to the development of the Greek economy over the coming years. They will give fresh impetus to economic growth, whilst ensuring prompt and efficient delivery of necessary infrastructure. In addition, more public funds will be made available for social purposes and priorities. PPPs yield important benefits for all stakeholders: the public sector, the country's citizens and the private sector, which gains access to a new expanding market. Therefore, PPPs are considered an important reform and a key pillar for the country's further development.