Greece Infrastructure Report Q3 2007

Located on the southern end of the Balkan Peninsula, the Hellenic Republic of Greece has witnessed a tremendous boost in its infrastructure since preparations began for the 2004 Athens Olympic Games.

BMI's newly released Greece Infrastructure Report Q307 forecasts an average construction growth rate of 3.4% over the 2007-2011 period. The construction industry contributed about 6.85% to the Greek gross domestic product (GDP) in 2006.

Until recent times, substantial European Union (EU) funding has significantly aided the development of Greek infrastructure and major projects currently underway in the country span the roadways, railways, airports, hotels, and telecommunications and energy segments. In order to ensure diversified sources of energy, Greece is also working on several oil and natural gas pipelines through many international agreements. The government is committed to privatisation and plans to promote the nation as a gateway for Chinese and Russian goods and energy into the Balkan Peninsula and the Black Sea region. Major players in the Greek infrastructure industry include local Elliniki Technodomiki-Aktor-TEB Group, J&P-Avax, Terna, Aegek and Athena.

However, the Greek construction industry faces certain drawbacks that can negatively influence its longterm growth potential. Since the majority of the Greek projects are financed by the EU, any reduction in the flow of funds can have a significant impact on the industry. Moreover, the nation is plagued by the widespread delays in project completion and inadequate private investment.

According to the BMI Business Environment Rankings matrix, the nation received the lowest rank among the seven chosen developed nations. However, the construction industry's value is forecast to reach EUR16.52bn (US$20.39bn) in 2011, from an estimated EUR13.98bn (US$17.30bn) in 2006.