Interview of Manos Moustakas, “Kathimerini” newspaper, Sunday 10 December 2023


GEK TERNA implements investments of over 10 billion. Group’s strategy focuses on large private projects that boost the economy.

GEK TERNA has been declared the preferred investor in some of the largest projects, such as Egnatia Odos, Attiki Odos and the integrated tourist complex with casino in Hellinikon. Where do you attribute the significant growth of the Group's portfolio?

It is important to explain and highlight what these "major projects" are essentially about, especially now that GEK TERNA has assumed a leading role along the implementation process of the projects. These are private investments with multiplier effect for the domestic economy and not public projects that are simply undertaken by a company based on a generous compensation. In other words, they are projects of concessions, privatizations, or Public-Private Partnerships (PPP), which are investments awarded to GEK TERNA Group through open, international tender procedures.   

GEK TERNA has long adopted this approach as the core of its business strategy and is not simply satisfied with undertaking public projects. In fact, the opposite is true. The construction backlog of the company - in contrast to its main competitors - consists by 65% of business activities originating from private projects, most of which concern the Group’s own investments. Nowadays GEK TERNA contributes over 6 billion Euros to the Greek public coffers (Integrated Tourist Complex in Hellinikon, Heraklion International Airport of Crete, Egnatia Odos, Attiki Odos, etc.) by undertaking such projects and by expecting these investments to return value to the Group over the following decades.   

The real economic growth is created by those who invest in the Greek economy, and not by those who simply “collect” public money. We would have an even stronger economy if other companies invested as much as GEK TERNA in Greece. In fact, GEK TERNA Group is implementing a total investment plan of more than 10 billion Euros that is about to generate 20,000 new jobs.


You attributed your dominance in these tenders to the fact that you have offered the highest bid. Given the fact that Egnatia Odos and Attiki Odos imply a significant cost for the Group, of over 4.5 billion Euros, how sustainable are these offers?
Let's please start with the obvious: no rational investor places bids under the belief of having to incur loss instead of profit. GEK TERNA, as the only one of the country's infrastructure groups that demonstrates a consistently profitable performance over the years, cannot be treated as "careless" or "opportunistic" player.

Firstly, we have the most experienced, long-running and diverse management team in infrastructure industry, capable of accurately and prudently estimating the infrastructure cost we bid for. Secondly, we have been efficiently operating concession projects such as Nea Odos and Central Greece Motorway for years, so we have the necessary expertise to tap on strategic opportunities and generate rational returns from motorway projects such as Attiki Odos and Egnatia Odos.
Thirdly, we have deep knowledge of financing the various complex projects in both Greece and abroad, proven capabilities to raise funds from the capital and money markets, as well as excellent relations with the Greek banking system. Furthermore it is worth noting that we are perhaps the only corporate Group that has maintained its entire liquidity within the domestic banking system. On the contrary other corporations in the most critical moment of the financial crisis had decided to flee the domestic market and transfer their capital abroad.   

We have a mutually beneficial relationship based on trust with the Greek banks that financially support the flagship projects we undertake and develop. This relationship is also based on the quality of management, its track record, as well as the extremely strong financial position and prospects of the Group.   
As result, GEK TERNA can be much more selective when looking at various investment projects, but also much more competitive when placing bids, and therefore more successful.   

Especially for the case of Attiki Odos, this is a project of low risk, stable return and with particular resilience as demonstrated by its performance during both the economic crisis and the recent pandemic. At the same time we estimate that under the management of GEK TERNA the project can yield an average EBITDA level of more than 300 million Euros on an annual basis. Accordingly, Egnatia Odos is the largest highway in Greece and for a very long period of time it has been completely unutilized. In our case, this particular project in combination with the other concessions of the Group (motorways, Port of Kavala, etc.), can generate a multiple value. However, another piece of evidence that the specific investment projects are efficient is the strong willingness of other competing corporate schemes to undertake them. The tender for Egnatia Odos was postponed several times and was taken to legal proceedings due to a number of appeals, while similar developments and actions have been recorded for the case of Attiki Odos. I find it rather difficult for someone to pursue a legal action in relation to a tender process if this person believes that the respective projects will not be financially beneficial and will not generate good returns.   
It is a fact however, that a long period of time elapses between the moment you are declared a preferred investor and the time you finally sign the contractual agreement and pay the price that corresponds to a particular project.   
I fully realize that for outside observers but also for anyone who has never been invited to go through the microscope of an international tender process and experience the maturation of a concession contract, these times may seem long, but in reality and in practical terms they are not.   

Today and compared to the past, tenders are multifaceted, processes have become more complex with multiple intermediate steps and there are more parties involved along each process. The contractor is being selected through an open, transparent and international tender procedure, which although usually carried out by TAIPED (HRADF - Hellenic Republic Asset Development Fund), involves a number of competent ministries, supervisory bodies, local government authorities, competent EU agencies, etc. In addition, the prerequisite actions on the part of the wider public sector authorities to get the projects to the tender date, and even more so to get them signed with the Contractor, are many and hard to accomplish. At the same time things are further complicated when pre-tender maturation actions are being implemented with significant delay, a phenomenon which unfortunately happens much more often than we would like. In addition, the ever-necessary transparency of procedures and decisions means that we must endure (with a smile) the inherent delay of appeals and objections, by parties who consider honestly or by impersonating a situation that they have been treated unfair.

For example, in the case of LARCO we already have an appeal from CMI submitted to Council of State, Greece which is set to be discussed on December 12, and respectively for Attiki Odos despite the rejection of their appeal by the Pre-Trial Appeals Authority, the consortium Vinci - Mytilineos submitted an appeal to Council of State as well. Furthermore in the case of Egnatia Odos, let's not forget that the tender started in 2017, whereas 7 extensions were requested from the participants - none of which was requested by GEK TERNA - with successive appeals submitted down the line, until GEK TERNA Group emerged in 2021 as the preferred investor (GEK TERNA placed a final bid which was three times higher than the one of the remaining bidder, i.e. the consortium Vinci – Mytilineos). In any case, especially in Egnatia Odos, for a long time now all the legal and financing documents have been submitted by our consortium to TAIPED and we are waiting for the completion of the procedure on behalf of the Greek State.   

Therefore, if we wish to discuss about delays, we should look carefully at the cause of each delay before asking whether they are related to GEK TERNA Group, i.e. the only consistent participant in the largest tenders of Greek state in the recent years that has never resorted to legal actions against the State or its competitors.

However even in investment projects like the one of Casino in Hellinikon, following the contractual agreement you signed 1.5 years ago, we still haven't seen bulldozers while there is a perception that you have modified your plans by actually reducing the size of the initial investment.
On the contrary, our plans and our envisaged investment in the Integrated Tourist Complex in Hellinikon have grown as a result of the improved aesthetic and functional architectural design following our collaboration with Hard Rock, but also as a result of the prospects we foresee. The final investment that we will implement with our partners will be greater than our initial offer and therefore proportionally greater will be its multiplier effect on the Greek economy. Preliminary construction activities and design works are already underway, while awaiting the final building permit.

I would like to ask you about the alleged deal for the sale of TERNA Energy which many present as a solution for the Group in order to finance other investments. Why haven't you come to an agreement? Are there any ongoing discussions with the stakeholders?
According to the published financial accounts, GEK TERNA possesses cash reserves that exceed 1.4 billion Euros (possibly the largest cash position among the listed companies based on publicly available data). At the same time, a significant additional liquidity is being generated from all core business activities within the Group that are sufficiently profitable. Examples may include the concession projects that are expected to contribute predictable and recurring free cash flows of 11 billion Euros over their lifetime, the construction activity that maintains healthy margins over time, but also the energy sector as a continuation of its vertically integrated structure. Also at this moment, the parent company's net debt accounts for 350 million Euros while the total debt position is governed by competitive terms as far as duration and financing cost are concerned. Finally as we have noted in the past, all the Group's assets are of high value, of high commercial interest and tradable. The above provide the means for the seamless implementation of our existing investment plan as well as for capturing new opportunities. So, as Mr. Peristeris has repeatedly stated, GEK TERNA Group will be fine both with and without TERNA Energy.

In any case, TERNA Energy is a valuable asset for the Group that was developed with vision and strong effort for over 25 years at a time when most of those who today rush to invest in green development projects were calling us romantics. Or the same people used to look down on the Renewable Energy Sources whereas today it is something that they so eagerly seek. TERNA Energy is the largest producer and investor of clean energy in the wider region of Southeast Europe with total capacity of projects in operation, under construction and ready for construction currently amounting to 2,500 MW. The Company has placed into operation the largest complex of wind farms in Greece with a total capacity of 330 MW, it carries out in an intensive manner the construction works concerning the large pumped storage project of 680 MW in Amfilochia, while it has made progress with one of the first two exploration licenses concerning Pilot Offshore Wind Farms in Greece. As the Management has officially and repeatedly stated, all these developments make TERNA Energy particularly attractive and recipient of multiple takeover proposals. Beyond that, our aim is to always maximize shareholder value and therefore whatever approach is likely to be selected in future will be most beneficial. If and when there is something concrete, we will proceed – as always – into a direct, formal and accurate announcement towards the investment community.