PPP cornerstone in place
The first scheme that uses private funds to build public sector buildings, in a move which is set to boost job creation and construction activity in the country, was approved by the government yesterday. The Public-Private Partnership (PPP) initiative awards the construction of state buildings to private companies which later recover their fees on an annual basis while the state uses the building. The scheme could be extended to other areas such as the running of hospitals. The joint committee – consisting of the Economy and Finance, Development, Education and Environment ministries – yesterday approved the first PPP tender relating to the construction of 27 school buildings at a cost of 200 million euros. The Organization of School Buildings (OSK), the state body responsible for housing schools, will pay an annual amount to the private firms over the next 25 years for the use and maintenance of the buildings. «The amount paid will depend on the quality of the maintenance services, based on the quality criteria which will be determined in advance,» the Economy and Finance Ministry said. The PPP projects are seen helping to fuel growth in the construction sector, which cooled off after the completion of the Athens Olympic Games venues and the downsizing of the government investment program by 40 percent last year. According to research company Hellastat, allocating projects through PPPs will have a positive effect on the quality of work, the time taken to complete the projects and employment in the sector – considered crucial to the economy. The government intends to broaden the usage of the PPP intiative as a means of constructing buildings for firefighters and correctional facilities. Economy and Finance Minister Giorgos Alogoskoufis has said that Greece’s PPP scheme is based on the British model. According to the ministry, more than 600 projects in the UK have been completed under the PPP model at a cost of about 5 billion pounds (7.2 billion euros) while in Germany similar projects have reached about 1 billion euros.
