GREECE’S TUNNELLING sector has been on a rollercoaster ride during the last 25 years, experiencing both dizzying heights and depressing depths as it has tracked the country’s economic fortunes.
Prior to 1990 there was relatively little tunnelling activity in the country – even Athens didn’t have a metro system, for example. From 1990, however, and until the economic crisis began in 2007, hitting Greece really hard at the end of 2009, there was a huge infrastructure boom.
European Union funding, coupled with long-term planning of Greek infrastructure improvements saw tunnels being constructed in road, rail, mining and hydropower projects.
Golden years
These projects included the Egnatia Odos (Roman Road) motorway, which connects the Epirus, Macedonia and Thrace regions in northern Greece and which was one of the largest and most ambitious civil engineering projects in Europe at the time. The road will be a key route in the developing trans- European road network (TERN) and forms an integral part of European route E90. The 670km motorway includes 73 twin bore tunnels with a total single tube length of around 100km and was completed by June 2009, on the eve of the financial crisis.
The PATHE (Patras-Athens- Thessaloniki-Evzoni) motorway, which is the main north/south road through Greece, also features "numerous kilometres of tunnelling" along its 550km length.
As does the construction of new high-speed railway lines from Patras to Thessaloniki, again linking north and south.
Another major project, the Attiki Odos (Attica Tollway), forms a 70km ring road around the Athens greater metropolitan area and includes 9km of tunnels.
Greek companies thrived during this period of intense activity.
As an example, leading design company Omikron Kappa Consulting SA (OK) tripled its annual turnover and resources.
"During this time we executed detailed designs of more than 70km in road tunnelling projects, approximately 20km in railway/metro tunnelling projects and approximately 20km in mining/hydraulic tunnelling projects," said Nikolaos Koronakis, OK’s president and chief executive officer.
Due to Greece’s complicated geotectonic zonation and the fact that most of the projects included ventilation chambers and deep shafts, much of the work was pioneering, he said, which enhanced OK’s expertise.
Just three of the many benchmark projects he cites by way of example are the longest highway tunnels in Greece: the 6km Tempi No. 2 twin bore tunnel including cross passages, ventilation chambers and shafts in the Maliakos-Kleidi motorway concession project; and the 4.5km Driskos twin bore tunnel in the Egnatia Odos motorway, which included a 200m deep vertical smoke extraction shaft.
OK also worked on the widest highway tunnels in Greece – the three-lane, plus emergency lane 4.5km Kakia Skala tunnels in the PATHE motorway. Construction surge At the core of Greece’s surge in infrastructure construction, particularly since 2000, was Public-Private Partnership (PPP) funding.
"In early 2000 the Greek State launched procurement procedures for the construction of five motorways as PPP projects (concessions) with the concessionaires comprising Greek construction companies and European companies from several EU member states," said Ioannis Bakogiannis, a mining engineer and head of the directorate for planning of infrastructure concession projects at the Ministry of Infrastructure, Transport and Networks.
The five motorways are the Olympia Odos (including nine twin bore highway tunnels with a total single tube length of 16km), the Aegean Motorway (including three twin bore highway tunnels, with a total single tube length of 22km), the Ionia Odos (including four twin bore tunnels with a total single tube length of 11km), the E65 (including six twin bore tunnels with a total single tube length of 9km) and the Moreas.
"These are part of the TERN and are considered to be among the most important infrastructure projects in Greece, connecting its regions and playing a decisive role in the country’s efforts to overcome the recession," said Bakogiannis, adding that more than 6,000 jobs were expected to be created during their construction. These concession agreements bundled the design, construction, operation, maintenance and financing phases together and are for a 30-year period, after which they will be returned to the State.
"The PPP model was selected mainly due to restrictions in increasing the country’s sovereign debt levels," said Bakogiannis. Furthermore, he added, bundling all the project phases together in one long-term contract rather than spreading them between many parties created a shared acceptance of responsibility.
According to the initial agreements the design, construction, operation and maintenance of the roads during the first phase was to be financed from the public purse in the shape of a State Financial Contribution (SFC) and motorway tolls; and from the private purse in the form of long-term loans and concessionaires’ equity.
The loans would be drawn progressively.
Tolls generated through the concession period are considered as public funds and one of the initial effects of the economic crisis when it hit in 2009/2010 was the 40 per cent reduction in traffic volume and subsequent loss of revenue. This, combined with the new credit environment the Greek government found itself in resulted in the lending banks retrenching.
"The Greek PPP projects were inextricably connected to the banking system, whereas the government-funded projects were mostly being financed by secured European funding schemes," said Koronakis.
"The lenders were very sceptical about the ability of the Greek government to meet all its contractual commitments for State financial contributions and other financial needs of the projects," said Bakogiannis.
Doubting the long-term viability of the projects, the banks suspended the drawdown payments for four of the concession projects – Olympia Odos, Aegean Motorway, Ionia Odos and E65 – resulting in the suspension of construction from spring 2011.
The Moreas was sufficiently well advanced to escape the suspension.
Infrastructure Restructure
However, while work was severely delayed, no projects that were already under construction at the end of 2009 were abandoned, although significant delays were recorded. After a two-anda- half year hiatus, in December 2013 the four concession contracts were restructured and work re-commenced. The roads should now be completed by the end of 2016.
"The restructuring was agreed on the basis of a new fiscal balance model, mainly in the form of substantial State financial contribution and a recycling mechanism of toll revenues," said Stavros Raptopoulos, president of the Greek Tunnelling Society.
"In essence the State has taken up all the contractual risks, acting more as a last resort funder than as a partner in a PPP."
He added that re-starting the concession projects didn’t involve any re-costing per se. Instead, some sections of the initial scope of works were dropped and will be constructed as conventional public procurement works.
"As for designs, no ad hoc amendments were made in order to reduce costs," said Raptopoulos. "Some changes did occur, but not directly linked with the present fiscal crisis in Greece. For example, final linings are conventionally constructed in Greece using reinforced concrete.
Before the current crisis, and due to the high cost of steel, some contractors had proposed the adoption of unreinforced concrete final linings in some instances (road tunnels or rail freight tunnels in competent rock and enough overburden cover)."
"Re-negotiations did not involve re-evaluation of tunnels’ designs given the fact that the designs were generally considered to be as optimum as possible and fit for purpose," added Koronakis.
In practice only the concession projects have been renegotiated and, according to Bakogiannis, there is still profit to be had – and this will increase in the case of economic recovery and an increase in traffic loads.
There has been some company-specific impact, of course. For example, prior to the crisis, Geodata Greece, the Greek arm of Geodata Engineering was involved in three major tunnelling projects: the detailed design of the Klokova twin road tunnel (about 3km), which is part of the Ionia Odos motorway; the detailed design of the Agios Georgios twin road tunnel (about 410m) in the Patra-Pyrgos motorway; and the detailed design of Line 3 of the Athens metro extension to Pireus (double track single EPB/TBM driven tunnel of about 6.5km).
When the economic crisis hit, only the Athens metro project continued smoothly.
"The first two projects were put on hold," said Nikolaos Kazilis, Geodata Greece branch manager.
"The Klokova project then continued but the design was awarded to a different company [on cost grounds] and the Agios Georgios project was cancelled."
Early stages project cull
Perhaps the most far-reaching impact of the current financial maelstrom will be felt in the future as many projects that were in the early stages of planning have been postponed. "There was an unparalleled cutback in new business developments in terms of launching new forthcoming tenders," said OK’s Koronakis.
"Many designers were driven to offer unacceptably low design tenders in order to maintain a piece of the pie and occupy themselves at any cost," he said, adding that OK had made the decision not to adopt this strategy.
"We decided that under no circumstances would we consider cutting back on the quality, reliability and fit-forpurpose value of our designs and services," he said.
According to the GTS’s Raptopolous, postponed tenders include Athens Metro Line 4, a state-of-the-art EUR 3.3bn (USD 3.65bn), 32km-long project destined to "dramatically upgrade the transportation system of Athens".
"The crisis brought about considerations for partial tendering of the project in five phases, A to E. A number of financing scenarios are under examination in order to create funding leverage using extra sources other than national or EU ones," said Raptopolous.
He added that the procurement of three new concession projects has been postponed: the 1.1km-long immersed tube road tunnel link from Salamis Island to Perama; the 1km-long immersed tube road tunnel link for Lefkas Island; and a new Elefsina-Thiva-Yliki motorway, bypassing Athens.
A number of rail projects, incorporating tunnels, had been severely delayed but are now back on track. "Excavation and final lining at the 9km-long single track twin tube Kallidromo rail tunnel have been completed and the remaining civil and E/M works are in progress," said the Ministry of Infrastructure, Transport and Network’s Bakogiannis.
"Also under way is the construction of the 5km-long single track twin bore rail tunnel in Panagopoula; and along the Lianokladi-Domokos rail section three small double track tunnels with a total length of 1.62km and the 6.4km- long single track twin bore tunnel of Mount Orthrys (including one 1km-long access tunnel) are under construction and 10 double track small tunnels and cut-and-covers are completed.
"Procurement of another section, including some rail tunnels, was announced at the end of March," added Bakogiannis.
"Over the last year some Greek PPP projects have been given the green light and are slowly but steadily being reactivated," said Koronakis. Among those that OK is involved in are the Maliakos- Kleidi (MK) motorway concession project and the Elefsina-Korinthos-Patras (EKP) motorway project.
"Both projects include the completion of a series of road tunnels with significant length," said Koronakis. "Tunnels Tempi No.1, Tempi No. 2 and Platamonas of the MK motorway total about 22km and the Panagopoula tunnels complex and Platanos tunnel of the EKP motorway total about 12km."
Greek Hopes for the future
Looking to the future, there is hope and expectation that many more projects will go ahead.
"I strongly believe that infrastructure projects always have a boosting effect on any economy, especially during periods of recession," said Ilias Michalis, a Greek engineer now working for Deutsch Bahn International on the Doha Metro Gold Line (see boxed text).
"That has always been the case since the 1950s. The Greek construction industry suffered major disruptions in the 1980s and 1990s but it managed to recover.
"Now the situation isn’t easy and new contract schemes must be used between the Greek State and the private sector," said Michalis. "These contracts must be focused on the development of existing infrastructures such as the airports and main ports at Greece’s tourist destinations as I believe the tourist industry is the main pillar on which growth in the economy of Greece can be based."
Metros and motorways are high on the wish lists of other key players. "I believe the main motorway concessions will go ahead with some modifications in their investment schedules," said Geodata’s Kazilis. "And I think some metro jobs, both in Athens and Thessaloniki will proceed as the demand is always there and some of the funding has been secured."
"I would like to see the Metro projects for Thessaloniki, Athens and some other large cities, such as Patras, go ahead," added Professor Alexandros Sofianos, director of the design and construction of underground works postgraduate course at the Department of Mining and Metallurgy within the National Technical University of Athens (NTUA).
"Trenchless technology related to sewerage renovation and water outfall have a high potential, although little has been done yet," he added.
"Some immersed tubes should also be considered, such as for the Salamina strait crossing."
Along with Athens’ and Thessaloniki’s metro systems, Omikron Kappa would also like to see the construction of new high-speed railway lines in the mainland; the construction of new roadway stretches in the provincial road network, or in existing by-passes; the construction and/or modernisation of airports and ports and their connections to road and rail axes; and dam construction and affiliated civil works relevant to water supply and irrigation schemes.
"These are sectors that could and should be improved in order for the country to be able to rise to the future demands," said Koronakis.
Short to medium-term aspirations for the Greek Tunnelling Society include the aforementioned Athens and Thessaloniki Metro systems and the completion of the "BOAK" (Crete’s north road axis), where only 41km of the total 310km have been constructed.
"It’s crucial to complete this motorway, which is part of the Trans-European Transport Network," said Raptopolous. He also cites the completion of the high-speed railway network from the west cost city of Patras to the Greek borders with FYROM, Bulgaria and Turkey and the linking to the EU and international rail network.
Others on the agenda are the construction, through a Concession scheme, of the "Castelli" international airport at Herakleion, Crete; various projects in the field of fluid and solid waste management and water resource management including small dams.
And importantly the construction of the Trans-Adriatic Pipeline and the so-called "Turkish Stream" natural gas pipelines and expansion of the natural gas local network.
Varying Confidence
Confidence and optimism levels differ depending on personal perspectives but there is a consensus that the Greek tunnelling sector will survive and, ultimately, prosper.
"Tunnelling projects will still have potential in Greece for a number of years because it’s not just a matter of choice, it’s a matter of need," said one contact.
"The construction sector must emerge stronger and with a different orientation," said Michalis.
"Some restructuring has already taken place and, in addition, the Greek construction sector has shown a significant extroversion, mainly in the areas of the Balkans and the Middle East," he added.
"These experiences will be extremely useful: they can provide the necessary financial means to the main Greek construction companies.
"And they can create confidence within those companies and their international competitors that co-operation is possible and can be beneficial under the current conditions of strong competition in the world construction sector"
