Kasteli Airport Deal Signed, Project Ready to Take Off

Impression of Kasteli airport.

Construction work on the highly-anticipated Kasteli Airport on Crete, is set to begin after Ariadne Airport Group – a joint venture between Greek firm GEK Terna and India’s GMR Airports Limited (GAL) – and Transport Minister Christos Spirtzis signed the concession contract this week at a special event.

Budgeted at 850 million euros, the project is expected to create 1,500 jobs during the construction period and according to an Air Transport Action Group (ATAG) study, some 7,500 direct employment positions once completed. An additional 37,000 indirect jobs are projected at opening up in the areas of tourism and trade.

Crete, Heraklion, Venetian Harbor. Photo © GNTO/Y.Skoulas

The consortium is planning on investing more than 500 million euros on the project, which is also financially backed by a combined state grant and equity.

More specifically, under the 35-year concession the consortium will be responsible for the design, construction, financing, operation and maintenance of the airport slated for opening in 2024-25. Construction works are estimated at lasting five years and will also include other key infrastructure projects on the island, such as the completion of the so-called north road axis and several peripheral roadway networks.

To be erected in Heraklion, Crete’s capital, Kasteli Airport is expected to handle more than seven million passengers a year replacing the current Nikos Kazantzakis facility and becoming Greece’s second biggest.

“The new airport will contribute to the economy and to the development of the island, and will significantly change the position of the island on the global aviation map,” said Crete Regional Governor Stavros Arnaoutakis, adding that it will also boost tourism to Crete all year round, upgrade its geo-strategic role, and create new jobs.

The transport ministry expects the so-called “third generation” concession venture to play a leading role in the development of Crete and “make a notable contribution to the productive reconstruction of the country… an investment that places the protection of the public interest and benefits for local communities above all”.

Moreover, the ministry adds, “the state has for the first time been able to maintain a strong presence in an extremely important investment, during both the implementation phase and the operation of the airport with specific benefits”.

Construction will begin once Greek parliament and competition authorities approve.