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Brussels alerts about unsuccessful investments in three Greek airports

18 December 2014 / 16:12:19  GRReporter
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The European Court of Auditors has declared unsuccessful the European investment in airports in five member states, including Greece. The reasoning of the decision states that unnecessary waste of resources and shortcomings in the work plans have been established as well as delays in the completion of activities on unnecessary structures.

The irregularities have been detected at 20 airports in Greece, Italy, Spain, Estonia and Poland. In Greece these are the airports of Thessaloniki, Kastoria and Heraklion, which were financed by the Cohesion Fund and the European Regional Development Fund in the periods 2000 - 2006 and 2007-2013.

The investigation has scrutinised whether the specific investment had been actually required, whether the construction works had been carried out on time, if the budget had been respected, whether the airports are underused today, whether the investment has led to an increase in passenger traffic and improved passenger services, and whether the airports are ultimately sustainable.

The conclusion of the judges is that, in many cases, the investments have resulted in a low value compared with the money spent and that excessive structures for the relevant capacity have been created very close to competing airports.

The report states that only half of the 20 airports have managed to achieve an increase in passenger traffic. At the same time, there is no measurable data available to show improvement in passenger services. According to the European Court of Auditors, seven airports are not profitable and the risk of closure for them is high, if the state funding is suspended.

In the case of Greece, the report notes that Thessaloniki, Heraklion and Kastoria airports are within two hours drive from at least one competitive airport.

The European Court of Auditors states that "there was no long-term strategic plan for airport development'', but only general plans that combined different modes of transport. However, they did not concentrate on the development of air transport and were not coordinated with the development of other means of transport that could potentially compete with aircraft.

In the period 2000 - 2006 Greece used 170 million euro and in 2007-2013 another 202 million euro from the Cohesion Fund and the European Regional Development Fund. I.e. it received 13% of the total amount of 2.8 billion euro, with which the European Union financed the development of airports.

Investment projects for Thessaloniki airport amounting to 54 million euro were scrutinised as well as the investment projects for Heraklion and Kastoria airports, amounting to 9 million euro and 5.6 million euro respectively.

The Court's opinion for all three is that the investment was not well planned whereas the investment projects for Heraklion and Kastoria airports have achieved their goals unlike the project for Thessaloniki airport.

The report points out that Kastoria airport did not require investments, Thessaloniki required partial investments and Heraklion airport absolutely required such. According to the judges, the Civil Aviation Service had requested unnecessary funding for infrastructure that the airports did not use, except for that in Heraklion.

The most severe criticism of the European Court of Auditors is that none of these projects has influenced regional development. According to the court's discretion, Kastoria airport is not sustainable whereas the airports in Thessaloniki and Heraklion are only partially sustainable.

In conclusion, the report states that the European Commission and the member - states have not properly coordinated the co-financing of the projects and the failure of European Union authorities to successfully supervise the activities has led to excessive expansion of airports and low value compared to the funds invested.

Therefore, the proposal to the Commission is, in the period 2014 - 2020, to fund only airport infrastructures that have a genuine need of renovation.

In its reply, the European Commission acknowledges the misuse of European Union funds in some cases, pointing out that the poor financial results are partially due to the economic crisis.

It states that, under the new framework, investments in airports will become more selective and strict, as the focus will be on the infrastructure of the trans-European transport network. It however stresses that unsustainable economic transport infrastructures need to be preserved for social considerations.

Tags: EconomyEuropean Court of AuditorsReportEuropean investmentsAirports
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