‘Call’ to institutional investors for the new concession of Attiki Odos

Within the month or at the beginning of the next at the latest, the tender for the new concession of Attiki Odos is expected to be announced, which will replace the existing concession, which expires in 2024. After a sprint of maturation moves, but also … painful negotiations , all the necessary pieces have been put in place and it is now expected that the board of directors of HRDH in the meeting of next Friday will approve the final issue of the tender announcement.

One of the crucial issues that was pending was whether the new concession would also include a construction object, ie the new extensions of the urban highway. Eventually, as everything shows, the new concession will proceed without the extensions to Rafina-Lavrio, Vouliagmenis Avenue and Kymi Avenue, although it will be strengthened with the so-called heavy maintenance of the highway.

According to information, this decision was taken at the highest governmental level and after intense negotiations, as there were particularly pressing requests for the integration of the new sections of Attiki Odos in the concession. According to sources who know people and situations, it was finally decided to proceed with the concession as it is, for two main reasons:

-First, the integration of the extensions in the concession of Attiki Odos would mean that any government revenue from the use of the extensions would be directed to the service of the Public Debt, as is the case with all revenues from the utilization of HRDH assets.

– Secondly, because without a new construction object the circle of potential stakeholders opens, as in addition to the construction groups, large institutional investors from abroad can also enter the game. The aim is to have participations from the so-called “infrastructure funds”, ie the investment funds that are placed in infrastructures, which offer stable returns.

Sources estimate that the participation of strong fund managers, such as the Australian Macquarie and the European Ardian, which operate large infrastructure funds, in the tender for the new concession can not only raise the price but also strengthen Greece’s position in the global game of attracting big institutional investors.

Strong revenues and profits

The new concession of Attiki Odos is also the biggest project that the HRDH is going to run in 2022. The CEO of the HRDH last September from the TIF had estimated that the financial consideration of this concession will break all records of privatizations, while Market estimates put the price above 2 billion euros.

This is because Attiki Odos is a highway that offers high revenues to the concessionaire. In 2020 alone, Attiki Odos distributed to its shareholders 82.6 million euros for the fiscal year 2019, including the interim dividend of 30 million in 2020. During the fiscal year 2019, 100.3 million euros were distributed, concerning its dividend 2018, amounting to 60.3 million euros, and the interim dividend of 2019, amounting to 40 million euros.

Another significant change that the new concession contract will have in relation to the existing concessionaire’s compensation will be calculated on the basis of gross revenue as is done on all conceded highways and not on the basis of internal performance (IRR).

The “puzzle” of extensions

As everything shows, the extensions of Attiki Odos remain permanently in the hands of the Ministry of Infrastructure and Transport, but this does not mean that solutions have been found for the auction of projects and their financing.

The extension of Kymi Avenue to PATHE is already being promoted as a public project, while in the coming months decisions are expected to be made for the extensions to Lavrio and Rafina, as well as for the connection with Vouliagmenis Avenue, which is even more complex.

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