A new, supplementary contract for the project has been published on Diaugia, Thessaloniki Metro, amounting to 54 million euros, plus VAT.
The project’s initial budget was just under 1 billion. The suspension of work during the previous New Democracy government, from 2012 to 2015, cost the Greek government nearly 200 million euros in compensation to contractors, increasing the project’s budget to 1.2 billion euros, according to 20%.
And all of this, for a project that was supposed to have been completed by 2012 and which had made progress of just 33% toward completion from 2006, when it began, through 2015.
The period from 2016 to 2019, however, was the most productive for the Thessaloniki Metro. Project progress has reached 75% out of 33% toward completion, covering the construction of 42% of the project in a record time of 3.5 years.
Meanwhile, in 2017, the construction of the dilapidated Venizelos Station was approved and began, using a method that met the demands of both the public and the international scientific community to keep the important antiquities in their original locations.
The impressive progress of the project allowed for the approval of a new timeline, according to which the project would be completed and operational from one end of the line to the other, by the end of 2020. The Venizelos station, which had only just begun construction at that time, would be completed three years later.
In 2019, however, immediately after the elections, The Mitsotakis government announced that it is changing the project's design. Under various pretexts, they reinstated the previous method of constructing the Venizelos Station, which imposed the the fragmentation and removal of antiquities. The project's completion was postponed by 2.5 years, with the new completion date moved from the end of 2020, as originally planned, to April 2023.
The change in the project’s design was accompanied by promises of a faster (!) and more cost-effective implementation. However, just as 2023 is earlier than… 2020, the cost of the project was reduced by relocating the ancient artifacts.
First, the need to conduct new studies for the construction of Venizelos Street using the removal-and-replacement method added to the cost.
Next came the need to dismantle—that is, to tear down—the projects worth 5 million euros that had already been built on Venizelos Street.
And then came the compensation payments. As is always the case when the New Democracy party is in power, the project began to experience serious delays. This time, as a result of the design change that the government itself brought about. The delays began to result in claims for compensation amounting to tens of millions of euros from contractors. In the first year of the delays alone, 2019–2020, the Greek government paid 19.5 million euros in out-of-court settlements. This counterproductive expenditure allowed public funds to be transferred to private coffers, without, of course, yielding any productive results.
New archaeological excavations, 3.5 meters below the floor of the ancient structures that are to be excavated (which are expected to delay the project far longer than the few months anticipated by Attiko Metro), new requirements for the preservation of the artifacts that will be removed, as well as those that will be uncovered during the excavations, and the need to reinstall the artifacts in the station, are estimated to cost 54 million euros, which amounts to a further budget overrun of approximately 5.5%.
This would certainly have been avoided if the project had continued with the ancient ruins on Venizelos Street left in place and had been completed as planned by the end of 2020.
If, in addition to the above-mentioned extra costs caused by the design change for the Thessaloniki Metro, we also factor in the lost profits resulting from the project’s inactivity, as well as the social and environmental costs of its delayed completion—which, according to Mitsotakis’s latest announcements, has now been pushed back to the end of 2023—that is, three years later—we arrive at a total cost overrun of the initial budget in the range of 10–20%.
The contractor is the big winner here, continuing to profit from a project that, according to the schedule he had signed, he was supposed to have already delivered by the end of 2020.
And anyone who thinks that this additional cost is a mandatory… adjustment following the Council of State’s ruling that the removal of antiquities was lawful, should be aware that the solution of leaving the antiquities in place, is not only lawful but also a scientifically acceptable and technically feasible solution, as dozens of expert scientists have confirmed in their technical reports. Furthermore, it is a solution that is both much quicker and much less expensive for the project.
So the question that should give us pause is why, between two legitimate and feasible solutions, the government chose not only the worst one—the one that destroys the archaeological treasure—but also the one that delays the project by at least three more years and, at the same time, increases its cost.
Some people call this economic—and at the same time social, environmental, and cultural—crime in the Thessaloniki Metro… “development”!
