What will judge the amount of offers for the concession of Attiki Odos

by Eleni Botas

The exploratory interest and the expectations for the price that will be achieved in the tender may be high, however the main factor that will determine the amount of the price for the concession of Attiki Odos, is the cost of money in the period in which they will be submitted. the financial offers.

In the first phase, the interested parties that have knocked on the door of the HRDH so far exceed 12.

Among them are institutional investors (infrastructure funds), international concession companies from Europe and America, but also the largest Greek groups that are preparing international alliances for their descent into the competition.

However, according to executives involved in the tender process, what is required are the schemes that will submit a financial offer, “those who will ultimately stay in the tender”, as they typically state.

The final phase of the tender with the submission of the financial bids is expected to take place next October and it is not excluded that we will see significant changes in the initial formations.

As for the amount of the price that will be given by the candidate schemes, it will be determined by the cost of money in the period during which the offers will be submitted, depending on the geopolitical developments but also the international macroeconomic conditions.

This means that estimates that the price may exceed 2.5 billion euros, given the current course of the highway in terms of revenue and traffic, but also the future prospects, should not be taken for granted as this will be determined by the level of interest rates, the level of inflation, etc.

In fact, as pointed out to the capital executives of Groups participating in the HRDH tender for the concession of Attiki Odos, if tenders held in the recent past took place today, under the prevailing economic conditions, the amount of bids would be different.

The possibility of an increase in interest rates by the ECB may be open from the end of the year and is a major source of concern for Greece.

The fact that the country according to Capital.gr has by far the highest debt ratio (expected to reach 195% of GDP at the end of the year) and has not yet recovered the investment grade, will significantly increase the cost of borrowing of the Greek State in the coming months.

After all, the outbreak of war in Ukraine further aggravates the situation. The peak of inflation will hit the growth and therefore the prospects of repaying the Greek debt, something that the markets will rush to discount at even higher interest rates.

The problem will be transferred to the private sector and in particular to the corporate bond market which will become unprofitable for issuing companies since the increase in public borrowing will also drag on that of the private sector. Fatally, the private sector and even large companies will turn to bank lending again, which will transfer to the real economy the increase in the cost of money that they themselves will incur.

Also high inflation (7.2% in February with estimates for 8% in March) is a blow to growth as it opens holes in the budgets and raises the operating costs of businesses.

Therefore, setting the price for the concession of Attiki Odos (the current one expires in October 2024) is an equation with many unknowns X, as the environment in the economy remains fluid.