| Finance & Legal |
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The total cost of the project, including financial expenses incurred during the construction period, amounts to about EURO 800 million. The financing comes from the following sources: 10% Share capital 45% State financial contribution 45% Loan from European Investment Bank guaranteed by a pool of commercial banks. |
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| Legal Scheme |
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Gefyra S.A., the Concessionaire, has a key role in this concession legal scheme and is party to most of the more than 50 agreements signed.
The documentation defines the detailed base case for the design, construction, financing, maintenance and operation of the Rion-Antirion bridge that each participating entity has agreed upon before the Effective Date (24 December 1997). It describes the various rights and obligations of each participant together with their respective commitments vis a vis each other. It also provides for a precise procedure and the required authorizations in case of departures from the base case.
Generally speaking the Concessionaire is fully responsible for the project: the legal scheme is made on its head and its sole objective is to achieve the project according to the base case. It has no right to carry on any business other than the Rion-Antirion bridge project. It is deemed to make the project successful.
The main agreements involving the Concessionaire are presented below. State
Concession contract
Pre-Effective Date agreements
Financial contribution agreement Shareholders
Shareholders undertaking
Equity letters of credit Lenders
EIB master facility agreement
Letter of credit facility agreement
Common terms agreement
Contingent facility agreement
Intercreditor agreement
Swap agreements
Assignment of security package
Direct agreements Technical & financial panels
Technical panel agreement
Financial panel agreement Checker & Supervision Engineer
Checker agreement
Supervision Engineer agreement Contractor
Desgn and construction contract
Pre-Effective Date construction contract
Performance bond
Advance payment repayment guarantee
Insurance package |
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| Documents |
Project documents |
Generally speaking, the project documents are executed in Greek and in English wordings with both texts having equal legal force. Greek law generally governs them.
The concession contract for the design, construction, financing, maintenance and operation of the Rion-Antirion bridge
Parties: The State, Gefyra S.A.
It is the founding and master agreement by which the State assigns to the Concessionaire the design, construction, financing, maintenance and operation of the Rion-Antirion bridge against the rights to levy tolls over a fixed period. The contract was ratified by the Greek Parliament on 24 April 1996 (law 2395/96). Its term is 42 years from the Effective Date (24 December 1997) but contains an early termination clause in case of the shareholders\' nominal return exceeding a certain threshold.
Signed in January 1996, the Rion-Antirion bridge concession contract (using international legal standards) was able to raise funding from the European Investment Bank and a pool of mainly foreign commercial banks. Its signing was a milestone in the development of private concession schemes by the Greek State.
The design and construction contract for the Rion-Antirion bridge
Parties: Gefyra S.A., Kinopraxia Gefyra
At the same time as entering into the concession contract, the Concessionaire and the Contractor have executed a turnkey design and build contract approved by the State.
Thereunder the Contractor is required to develop the detailed design for the Rion-Antirion bridge and to complete the construction by no later than 7 years (24 December 2004) from the Effective Date. The lump sum price payable to the Contractor is not subject to revision nor based on the actual quantities of materials. The construction contract includes standards provisions stating inter alia the joint and several liability of the Kinopraxia Gefyra members, the issuance of a performance bond to the benefit of the Concessionaire and a dispute resolution procedure.
The pre-Effective Date agreements
Parties: The State, Gefyra S.A., Kinopraxia Gefyra
Performed through 1996 to 1997, these contracts have permitted to carry out the last surveys in the Rion-Antiron strait seabed subsoil.
The Checker contract
Parties: Gefyra S.A., Buckland & Taylor Ltd.
The legal scheme provides for an independent highly skilled engineering consultancy recognised by all participants to check the design developed by the Contractor.
The Concessionaire has required Buckland & Taylor through the Checker contract to approve the final design for the Rion-Antirion bridge and each and any construction drawings.
The Supervision Engineer contract
Parties: Gefyra S.A., FaberMaunsell Ltd.
The works carried out by the Contractor are supervised by another highly skilled engineering consultancy, independent and recognised as such by each participant.
The Supervision Engineer is required to satisfy himself with, and to report on, the good performance of the Contractor when building the bridge. More precisely he has to verify that the works on site are complying with the construction drawings approved by the Checker and with respect to quality, safety and the environment. He also certifies the completion of the bridge.
In addition, the Concessionaire has required the Supervision Engineer to issue monthly a payment certificate detailing the payment milestones achieved by the Contractor. Amounts payable to the Contractor by the Concessionaire under the construction contract are according to this certificate.
The financial contribution agreement
Parties: The State, Gefyra S.A.
The financing for the project comprises a subsidy from the State.
The financial contribution agreement details the financial commitments of the State towards the Concessionaire. They are split over the 7 year construction period and subject to the achievement of certified works by the Contractor. The total commitment amounts to EUR 200 millions, in July 1993 value.
The shareholders undertaking
Parties: Gefyra S.A., VINCI, J&P (HELLAS) S.A., ELLINIKI TECHNODOMIKI S.A., VOLOS\' TECHNICAL COMPANY S.A., ATHENA S.A., PROODEFTIKI S.A., C.I. SARANTOPOULOS S.A.
Through the shareholders undertaking, the shareholders of the Concessionaire have committed to pay in EUR 46.5 millions, in July 1993 value, as share capital and to issue bank letters of credit for the full equity amount unpaid at the Effective Date.
The shareholders have also agreed to pledge all their shares into the Concessionaire to the benefit of the Lenders.
The technical panel agreement and the financial panel agreement
Parties: The State, Gefyra S.A., the 3 members of the technical panel, the 3 members of the financial panel.
The concession contract and the construction contract provide for a dispute resolution procedure of international standards with two 3-member panels as arbitrators. These panels are empowered with the ability to quickly settle possible disputes between the participants, each participant having accepted that a unanimous decision of a panel be final and binding with immediate effect. |
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The financing documents |
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The EIB master facility Agreement Parties: Gefyra S.A., European Investment Bank.
The EIB master facility agreement is the main loan agreement by which EIB grants to the Concessionaire an EUR 370 million floating interest rate loan.
The loan was drawdown during the construction period according to the funding needs of the Concessionaire and will be repaid in full no later than 25 years from the last disbursement. A condition precedent to the first drawdown under the EIB loan was the approval by the Checker of the final design for the Rion-Antirion bridge.
During the construction period, the prior issuance of bank letters of credit to the benefit of EIB should have guaranteed each drawdown. In 2006, GEFYRA S.A. converted a part of the total loan (100 million euros) to a fixed interest rate, within the framework of its policy to compensate the interest rate risks. The letter of credit facility agreement Parties: Gefyra S.A., a pool of commercial banks including European Investment Fund.
The letter of credit facility agreement had the first purpose of the availability to the Concessionaire of bank letters of credit to guarantee each drawdown under the EIB loan. The letters of credit were securities only but could be called in case of specific defaults of the Concessionaire under the financing documentation. Should the EIB called, the commercial banks would have been vested with all the Lenders rights vis-a-vis the Concessionaire. The letters of credit expired on August 2004, at the completion of the works for the Rion-Antirion bridge.
In certain restricted circumstances, the letter of credit facility agreement also provided for possible cash advances from the commercial banks to the Concessionaire. The common term agreements Parties: Gefyra S.A., European Investment Bank, a pool of commercial banks including European Investment Fund.
The common terms agreement was a framework agreement for the EIB master facility agreement and the letter of credit facility agreement.
It detailed the undertakings of the Concessionaire towards the Lenders and defined the events of default of the Concessionaire, which may have led to immediate repayment demand of the Lenders debt. |
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| Entities |
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The Greek State |
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The project comes under the auspices of the Ministry of Environment, Physical Planning and Public Works (MEPPPW) acting on behalf of the Greek State. The Minister of Environment, Physical Planning and Public Works signed with the Concessionaire the first private infrastructure concession in modern Greece. The Greek State required the Concessionaire to design, construct, finance, operate and maintain the Rion-Antirion bridge against the rights to levy tolls on a fixed period.
The Special Service for Public Works EYDE / SE.RA is monitoring the project on a day-to-day basis on behalf of the State.
more about the MEPPPW
Highly considered as achieving economic and social cohesion in the European Union, the Rion - Antirion bridge project is eligible to the European structural funding. The European Regional Development Fund (ERDF) has positively answered to the request from the Greek State to co-finance this project through the State financial contribution.
more about the European Union |
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The checker & supervision Engineer |
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Buckland & Taylor Ltd. is an engineer firm based in Vancouver, Canada. It has been appointed by the Concessionaire, with the agreements of the State and the lenders to act as the independent Design Checker for the project. Its role essentially is to approve the design developed by the Contractor and to sign off the construction drawings. The Checker team includes the Greek company DENCO and American specialists like Dr. Peck or Dr. Dobry or Dr. Priestley and Dr. Seible, who are world renowned in their respective technical fields (geotechnique, geodynamic and seismic structural design).
more about Buckland & Taylor Ltd.
Faber Maunsell Limited has been appointed by the Concessionaire, with the agreements of the State and the lenders, to act as Supervision Engineer for the project. His role is to satisfy himself that the works built by the Contractor comply with the requirement of the Construction Contract and to regularly report to the Concessionaire, the State and the lenders.
Having head office in the United Kingdom, the Supervision Engineer is now based in the Antirion site. It works in collaboration with the Greek company DENCO.
more about FaberMaunsell Ltd. |
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Banks |
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The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union and is based in Luxembourg. The task of E.I.B. is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. In order to receive EIB’s support, projects must be viable in four fundamental areas: economic, technical, environmental and financial. EIB appraise each investment project thoroughly and follow it through to completion. |
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