Construction on an €8bn private project to redevelop a sprawling coastal site south of Athens as a tourism and leisure hub has been cleared to begin this year after Greece’s parliament gave its backing on Thursday.
The leftwing Syriza-led government dropped its opposition to the scheme after the privatisation agency, Taiped, tightened the terms of a sale-and-lease agreement that the previous centre-right led administration had signed with an international investor consortium.
Alecos Flambouraris, minister for co-ordination and a senior Syriza member, told parliament before Wednesday’s vote to ratify the project: “We are [still] against privatisation but we are in favour of the development of publicly owned real estate.”
It would be the most ambitious development project ever undertaken in Greece. Few in Athens believed it would go ahead even with pressure from bailout creditors, given the snail-paced progress of privatisation under successive governments.
The 620-hectare site of the disused former Athens international airport at Hellenikon — larger than the principality of Monaco — would be transformed into a luxury resort featuring six-star hotels, a marina, apartment blocks and shopping malls, surrounded by what would be Europe’s largest metropolitan park. The 200-hectare park would almost double green space in Athens, one of Europe’s most densely built capitals.
Euclid Tsakalotos, finance minister, soothed fears expressed by Syriza officials that the developers would limit public access to the metropolitan park, telling parliament: “Even though the master plan as presented is not binding on the investors, the amended agreement says no restrictions will be imposed on the movement of citizens.”
Syriza’s endorsement of the project has revived the Greek travel industry’s hopes of making Athens a high-end global tourist destination over the next decade.
“Hopefully, this project will boost Greece’s image and help reignite investment in tourism, even though it’s not enough on its own to change the whole picture,” said Andreas Andreadis, president of the Greek tourism enterprises association SETE.
Greece is on track to welcome a record 24.5m tourists this year, 1m more than in 2015. But income from tourism, which accounts for a quarter of national output, was expected to remain at last year’s level of €14bn, Mr Andreadis said.
“[Visitor] numbers are rising because of last-minute bookings but this category of tourists on average spend less,” he said.
The Hellenikon site was abandoned after staging a handful of sports events at the 2004 Athens summer Olympics. The rundown former terminal building this year became a temporary camp for several thousand refugees and migrants stranded in Greece after countries along the so-called Balkan route to central Europe closed their borders to asylum seekers.
Greece’s Lamda Development, leading an investor group that includes the Chinese conglomerate Fosun and Al Maabar, a real estate company linked to Abu Dhabi’s sovereign wealth fund, said on Thursday that the amended agreement had “acquired the force of law” after the parliamentary vote.
The ratification by parliament of the Hellenikon agreement was among 15 reforms demanded by creditors in order to unlock €2.8bn of funding from Greece’s €86bn third bailout.
The investor consortium agreed to pay a total of €915m in instalments by 2022 for a 99-year lease on the site. It would invest another €7bn over a 12-year period to complete the development. This year’s budget foresees revenues of €365m from the project
The development is expected to create about 70,000 jobs during the construction phase and 35,000 permanent positions.
