Privatization through concession and the peril to public interest - the case of "Egnatia Highway"

Abstract

This paper focuses on the financial and developmental effects of privatization of public infrastructure projects through based on the case study of ‘Egnatia Highway’ that connects the port of Igoumenitsa in Western Greece with the Greek-Turkish borders in Thrace. Following an informative chronicle of the creation of the ‘Egnatia Odos’, in the second part of the manuscript, we develop the theoretical framework of our analysis by studying the history and the effects of similar concession projects in Greece and abroad. Specifically, we discuss the Morandi Bridge in Genoa, the motorway around Strasbourg, public roads in Croatia, as well as similar cases outside Europe and Latin America, in particular. In the main part of the study, we present a detailed analysis of the intended 35-year concession of ‘Egnatia Odos’ based on data from past years and official forecasts concerning the operation, maintenance and commercial exploitation of the specific public asset. Our analysis reveals that avoiding the concession and sustaining public management benefits public interest, Greek society, and the economy. Data prove that public management will generate significantly higher profits for the State while keeping the toll charges at lower levels. At the same time, given the geo-economic significance of the highway in the light of collective management in the Balkans, controlling the specific asset is of exceptional national economic importance.