INTERVIEW-Greece seeks bidders for $1 bln Crete airport

Angeliki Koutantou

Reuters

* Chinese, French, German, Spanish firms are seen bidding

* Debt crisis has delayed construction of airport

* Greece also plans motorway, subway upgrades

ATHENS, June 18 (Reuters) – Chinese, French, German and Spanish firms are vying to build an 800 million euro ($1 billion) airport on the island of Crete, one of a number of projects planned by Greece as it recovers from a recession, the infrastructure minister said.

Investment in new airports, motorways and ports are key to helping Greece\’s ailing economy as it slowly emerges from a six-year economic slump. Crete is considered a prime spot because of its strategic location wedged between Europe, Asia and Africa.

Athens re-launched the tender for the Kastelli airport in May, after plans to build the terminal were shelved at the peak of its debt crisis in 2011. The country hopes Kastelli and planned road projects will help kick-start its economy.

Crete is one of the biggest resort islands in Greece, which is one of Europe\’s top tourism destinations.

The airport is expected to be completed by 2019 and would handle about 7 million passengers a year, mostly tourists.

Kastelli will become Greece\’s second-biggest airport after Athens in terms of foreign traffic. It will replace Crete\’s outdated Heraklion airport, which is bursting under the strain of handling millions of tourists a year.

\”It\’s a big deal, one of the biggest public investments in the country after the crisis,\” Infrastructure Minister Mihalis Chrysochoidis told said in an interview on Wednesday.

The winning firm will have a 35-year concession on the airport. Companies are expected to submit their bids on November 11, but it is uncelar when a winner will be announced.

Chrysohoidis said the economy had improved since April, when in a sign of growing confidence in the country, investors eagerly bought 3 billion euros of Greek government bonds, ending Greece\’s four-year exile from bond markets.

\”The country has turned the page because it escaped default and has achieved a primary budget surplus,\” he said.

He did not name the firms expected to bid for the project.

One of the possible bidders for Kastelli is China\’s State Construction Engineering Corporation, according to Greek media. Chinese Prime Minister Li Keqiang will visit Athens later this week to discuss possible investment projects.

Chinese firms have already played a big part in Greek projects. Fosun is part of a group in a 7 billion euro development of a disused airport in the capital city of Athens, while Cosco has expressed interest in buying OLP , Greece\’s biggest port.

Chrysohoidis said a 75 km (45 miles) motorway expansion project in the southern Greece Peloponnese region estimated to cost 300 million euros will be tendered soon, part of a series of new infrastructure projects.

The Peloponnese project is part of a nationwide, ongoing road-building program which has been recently resuscitated and which the minister expects to create 20,000 jobs by the end of the year. Unemployment in Greece stands at 27.8 percent.

There were also plans for an expansion of the subway network in Athens, which will add 33 km to the existing 64 km grid at a cost of up to 3.5 billion euros that could be paid for through a combination of state funds and private banks, he said.

($1 = 0.7345 Euros)

(Editing by James Macharia)