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Today, the Hellenic Parliament ratified the Concession Agreement for the study, construction, financing, operation, maintenance, and exploitation of the Northern Road Axis of Crete (VOAK) covering the section from Chania to Heraklion, with a total length of 157 km.
The project also includes an optional section from Kissamos to Chania, approximately 30 km long. This option will be activated immediately after the issuance of the Environmental Terms for that segment.
In his speech, the Minister of Infrastructure and Transport, Christos Dimas, emphasized that the Northern Road Axis of Crete is the main developmental road corridor on the island, ensuring safe travel while acting as a catalyst for the economic, tourism, and social advancement of all of Crete.
Mr. Dimas noted that alongside the start of preliminary works outlined in the Agreement, the Ministry has requested the concessionaire to prepare studies for safety interventions in areas where traffic accidents have been recorded, with the aim of initiating some of these by this summer.
The Minister reiterated, “The strategic goal of the Government remains for the Northern Road Axis of Crete to be a unified, modern, and safe road network connecting Kissamos to Sitia, from the western edge of the island to the eastern.”
He added that studies for the expansion of the VOAK towards the east, from Agios Nikolaos to Pachia Ammos, have already been completed, and that the Ministry will soon fund studies from Pachia Ammos to Sitia.
The Minister highlighted the crucial role of the Greek government, which, through persistence, consistency, and continuous negotiations, secured funding and positioned the project for implementation, benefiting the public interest and local community.
Regarding the issue of tolls, Mr. Dimas stated: “There is no highway without tolls. By exempting tolls, we would further burden taxpayers nationwide for the costs of construction, operation, and maintenance of the project.”
Concluding his remarks, Mr. Dimas stated: “With today’s ratification, we confirm the obvious! A project that has delayed starting is now established on solid foundations, with secured funding and long-term prospects, under the guidance of the Prime Minister. All governments led by Kyriakos Mitsotakis since 2019 have worked systematically to reach this point in ratifying the central section of the VOAK, especially all my predecessors. We are tangibly supporting the VOAK, and we will vote in favor, making this a reality. Some indulge in petty political excuses while others focus on tangible projects.”
Responding to criticism from the Opposition, Deputy Minister of Infrastructure and Transport Nikos Tachiaos pointed out:
“You accuse us regarding the Agreement, but it is the product of a tender that began under SYRIZA in 2018. The tender pertained to the study, financing, construction, and operation of this section of the VOAK under a Concession Agreement. Is there anywhere in the world a Concession Agreement where a party is tasked with financing a project without any repayment? Is SYRIZA suggesting they would cancel this agreement? Which one? The one resulting from a tender they initiated?”
“We stated that urban transport will not involve tolls. This means that the construction cost, estimated at around €2.1 billion, must be covered by other forms of transport. These funds—representing the project’s construction cost—must be repaid, either through equity or loans. Thus, the existence of tolls is necessary. Regarding their prices, we have indeed established shadow tolls, having negotiated a discount from the maximum limit of 100%. These shadow tolls are essential to ensure that the fee paid by users in Crete aligns with the rate structures applicable elsewhere in mainland Greece. If toll costs for project repayment had to be borne solely by users, as you might suggest, it would rise by at least 64% over current rates.”
“We believe the government of Kyriakos Mitsotakis, with this Concession Agreement awaiting ratification by Parliament, is undertaking an extremely challenging project that we will manage in absolute unity with the local community. We will consult with all municipalities, the region, and those with opinions on this project.”
Technical Details of the Concession Agreement
Project financing:
- Firstly, the Concessionaire is obligated to invest a total of €219.3 million from its own resources. If the optional right is exercised, this investment rises to €243.5 million.
- Secondly, the State’s Financial Contribution amounts to €693 million, which increases by €99 million if the optional right is exercised.
- Thirdly, regarding loans to the Concessionaire from commercial banks, these total €971.8 million without the activation of the optional right (Kissamos – Chania section). If the option is activated, loans will rise to €1.079 billion.
The Agreement stipulates a maximum toll rate of €0.053 per km before VAT (as consistent across all highways in the country) for vehicles classified as category 2 (vehicles with or without trailers and a height of up to 2.20 m), while other categories remain the same as for other highways.
According to the announcement, since the revenue from the established tolls is insufficient to cover the total infrastructure costs (including operation, maintenance, debt servicing, and equity returns), the State opted for the payment of Shadow Tolls to the Concessionaire. This percentage formed part of the Tender assessment and amounts to 64.62% of the applicable toll rate.
Additionally, the contract specifies that if the return on the Concessionaire’s investment exceeds the agreed threshold, the percentage of Shadow Tolls will decrease incrementally and ultimately be eliminated.
The Concession Agreement for the Chania – Heraklion section is established between the Greek State and a private limited company named “DIKTAION CONCESSIONS SINGLE MEMBER,” and thirdly, the private company “GEK TERNA.” The Concession Agreement has a duration of 35 years, of which 5 pertain to the Study and Construction Period.
Regarding the expiration of the concession period, as per the announcement, a process for the return of the project to the State is established, involving successive inspections of the project to determine its condition in accordance with contractual requirements.
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