Crete Locals

Kastelli airport compensation payments rise to €444 million, total construction cost nears €1.2 billion

· By CreteLocals Editorial Team
Kastelli airport compensation payments rise to €444 million, total construction cost nears €1.2 billion

Compensation payments linked to the construction of the new Heraklion International Airport at Kasteli have increased to €444.3 million, according to a decision issued by Greece’s Ministry of Infrastructure and Transport. The revision pushes the total construction cost of the project to nearly €1.2 billion.

The ministry’s decision amends the act covering “compensation arising from the contract for the study, construction, financing, operation, maintenance and exploitation of the new Heraklion International Airport in Crete and its road connections” (Law 4612/2019), listed under OPS code 5227109 within the 2021-2025 Public Investment Programme for infrastructure and transport.

According to the physical scope of the act, compensation for the project covers four categories: an extension of the overall deadline for the studies and construction period and its partial deadlines; lost revenue for the company over the 24 months by which the start of the operation period was delayed, minus the corresponding availability-fee amount for the studies and construction period; a shortfall in the airport company’s availability-fee amount for 2020 and 2021 due to measures taken in response to the COVID-19 pandemic; and additional costs to the airport company stemming from a legislative change requiring construction of a 3-kilometer tunnel.

The ministry had initially set the compensation figure at €363.9 million last November; the new decision raises it by about €80 million. The original cost of the project was €625 million. The increase formalizes cost rises previously reported by ypodomes.com since last autumn, linked to the four factors above. The tunnel is the single largest cost item, exceeding €160 million, and was deemed necessary after antiquities were found in the Petriakos Lakkos area. With the revised figures, total construction cost now stands at close to €1.08 billion.

Construction progress

Under the current schedule, test flights at Kasteli’s international airport are planned for 2027, ahead of the start of regular operations. Construction progress currently exceeds 75%, and on August 7 a contract was signed covering the airport’s air navigation systems.

The contract was signed between the concession company Heraklion International Airport (DAHK) and the consortium Indra Sistemas S.A. – ATESE, in the presence of Minister of Infrastructure and Transport Christos Dimas, Deputy Minister Nikos Tachiaos, Secretary General of Infrastructure Dimitris Anagnopoulos and Civil Aviation Authority Governor Giorgos Vagenas. The agreement covers the study, supply, installation, integration, testing and commissioning of the airport’s air navigation systems, including related works and services, over a 27-month period from signing. Its total cost is €105,219,189.40, including 24% VAT. Adding this amount to the construction budget brings the overall cost of the new airport to nearly €1.2 billion.

Timeline and expected capacity

The new airport is intended to develop into an aviation hub for the wider region. Shareholders in Heraklion International Airport (DAHK) include the GMR Group, the Greek state (45.9%) and the GEK TERNA group (32.46%), with a stated aim of maintaining high passenger traffic year-round.

Officials cautiously place the start of operations in 2028. The airport is estimated to initially handle 11.5-12 million passengers a year, rising to nearly 18 million within 30 years. Future expansion of the terminal and other facilities has already been planned to accommodate further passenger growth.

Planned facilities

Once complete, the airport is designed to include a 3,200-metre runway rated ICAO category 4E, a parallel taxiway of equal length, and an apron for both fixed and remote aircraft stands. The terminal building will span seven levels and 93,000 square metres, alongside a control tower measuring 44 metres in height. Parking is planned for 1,378 vehicles, 206 motorcycles, 168 taxis and 96 buses, along with a 400-stremma commercial zone.

Road works tied to the project include a roughly 18-kilometre motorway connecting the airport to the BOAK highway near Chersonissos, a roughly 6-kilometre link to the Arkalochori-Viannos road, a 1.5-kilometre Kasteli ring road, and upgrades to existing roads spanning an estimated 20 kilometres in total.

The Kasteli project follows other recent developments at Crete’s airports, after data showed Heraklion airport passenger traffic rising 3.3% in July, and separate reports noting the airport served 181,000 passengers over a three-day period during the peak summer season.

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