Christos Hadjiemmanuil President of Hellenic Olympic Properties

PM Communications: Dr. Hadjiemmanuil, first and foremost allow us to thank you for taking the time to meet with us. IOC president Jacques Rogge called Athens 2004 the "dream games." The Greeks defied the pessimists by holding spectacular Olympics and the Games served as a catalyst to transform the international image of the country. What do you feel were its main achievements?

Dr. Hadjiemmanuil: The main legacy of the Games was the re-branding of the country. Greece had an image problem - even the positive aspects of our image could be considered as somewhat dated. People thought of Greece as a pleasant country, steeped in history; a country of sun, sea and sand, certainly - but also a bit laid-back. Not being able to project a modern and dynamic image was a problem. The faultless organization of the Olympics changed all that, displaying our capacities in various ways. It was not simply a question of hosting a significant event; we were also able to demonstrate that logistics is no longer a problem and that we can handle large-scale organizational challenges. There was no prior benchmark; we had never tried our hand at an event of this complexity, so this was a true first, a test case. Nonetheless, we demonstrated that we could manage it perfectly well. The combination of a new image for the country with huge worldwide visibility had a very powerful impact. In intangible terms, the Olympic Games were a great success.

This intangible legacy goes hand-in-hand with new, improved physical infrastructure. The road network and the subway have improved considerably the quality of life in Athens. Significant works have been done in the private sector. Many buildings were renovated, the number of high-quality hotel rooms increased significantly. All these make the city more attractive and provide the necessary infrastructure for the tourism industry to flourish.

PM Communications: Prime Minister Karamanlis has said that the main goal of his government's post-Olympic strategy would be to "further boost Greece's image abroad". What role does the fate of the symbolic Olympic sites play in its international image?

Dr. Hadjiemmanuil: Before the Olympics, Athens lacked large-scale, publicly accessible facilities. I am not necessarily talking about free-access facilities, but about facilities where big public events can be hosted. Athens is one of Europe's great metropolises; it ranks with a handful of similarly-sized cities, coming just below the great urban centres of London and Paris. However, the city lacks open spaces and the possibility of easy expansion, as it is surrounded by mountains and contains very few greenfield or brownfield sites. It is therefore difficult to build facilities proportionate to the size of the city and up to the standards of 21st century cultural, sporting, recreational and tourist needs.

The great thing about Hellenic Olympic Properties is that its core portfolio includes the majority of properties of this scale in Athens and Attica. It comprises very large-scale athletic and non-athletic properties, which, regardless of their Olympic origins, offer a unique opportunity for transformation into the critical infrastructures of a modern metropolis. For example, until now Athens has never had a large winter theatre. It has a number of open-air summer theatres, but in winter up till now you could not stage a large-scale theatrical production. Now there are a couple of significant private venues; and there is a third potential cultural venue in the Badminton facility in Goudi, in the centre of what will become the second metropolitan park of Athens. We have already staged significant international productions in this venue, for instance "Cats". In the past, Athenians would have to travel abroad to attend such a spectacle...

PM Communications: Greece's tourist economy accounts for more than 18 percent of the country's GDP. The Olympic Games changed the image of Athens in particular. How will the facilities you are managing help to make the capital a more attractive destination for a city break or business conferences?

Dr. Hadjiemmanuil: Greece is the tenth most popular tourist destination in the world; nonetheless, traditionally Athens receives very few visitors compared to the rest of the country, or foreign cities of a similar size. The reason is that the city product was not totally satisfactory. To turn Athens into a city-break destination, a number of critical factors should converge to create a worthwhile product. We have always had cultural tourists, but that is not enough! Now, Athens can offer a mixed and comprehensive tourist product! Transportation and hotel accommodation have improved tremendously.

However, there is one thing still lacking, and this is a convention centre. For this reason, we have decided that the Tae-Kwon-Do facility, on the Faliron coast, will become a convention centre. Before taking this strategic decision, we talked to the representatives of the tourist industry and explained to them what were the realistic options; the outcome was pretty evident: everybody agreed on Tae-Kwon-Do. Should you need to make a hard choice, look at the bottom line! The bottom line here is that that a coast-side facility, in an area that will be one of the two major seafronts of Athens, which is easily accessible from the centre of the city and all the important upper-end hotels, can make an excellent convention centre.

The purpose is not to maximise value for the company. A convention centre is not the most profitable use from the perspective of the company; but it is an essential infrastructure for today's city and its economy. By the way, we are 100% state-owned. The main shareholder is the Ministry of Finance, which is responsible not only for collecting revenues, but also for spending money in investment intended to boost the country's economic and social performance. As a result, when Hellenic Olympic Properties makes decisions, we take into account three layers of economic objectives - the corporate, the fiscal, as well as that of the general economy. In the case of the convention centre, we also took into account economic factors that went beyond the company's profitability. A decision was made after considering that the convention centre would boost the economy of Athens, and thus boost tax revenues; in this sense, it forms part of a sound general economic policy.

We are currently in discussions with Hellexpo, a major public-owned enterprise specializing in exhibitions and conference organizing, to establish whether it would make sense for them to take over the management of the convention centre. Soon, we will decide how to proceed, with a view to ensuring that the convention centre will move ahead as soon as possible. It should be operational by 2007. However, we are not here to subsidise it, so the fact that we supply a facility in an exceptionally advantageous spot of land, that has already cost the taxpayer Euros 30mln to build, should be enough.

The general philosophy of Hellenic Olympic Properties is based on four main pillars. Firstly, each property should have an identified core purpose. Secondly, in terms of their intended uses, the facilities should complement each other. Thirdly, taken together, these facilities should boost the economy of the city and offer opportunities for entirely new types of social and economic activity. And fourthly, the future operations must be financially viable. Obviously, we will never be able to recover the construction costs, but we want to ensure that future functions will be operationally and financially viable.

PM Communications: As a highly respected finance lawyer and academic, the New Democracy government asked you to take charge of these venues after the previous administration had failed to make any plans for their post-Olympic use. How has your background enabled you to lay the groundwork for the effective management of these properties?

Dr. Hadjiemmanuil: My legal background was definitely a plus. To start with, we had to resolve a lot of problems in regard to the legal situation of the Olympic facilities. Legislating new land use for the venues required a considerable amount of effort and time; this phase was completed in June 2005.

More precisely, the first six to eight months of the new government's term were spent in legal due diligence, as well as in trying to identify the main strategic objective for each facility. Then, the implementation of our strategic plan had to go through two phases. On the one hand, we had to establish the legal ground; this was done in the form an act of parliament regulating specifically the Olympic facilities. Immediately afterwards, we started issuing tenders for certain facilities.

The intention is to eventually transfer almost half of the facilities to private management, permitting their commercial exploitation, always within the four corners of our strategic objectives and the new land uses. Tenders have already been issued for five sites, and we are steadily approaching the completion of the relevant processes. This first wave of tender processes should be over by late March. Simultaneously, we proceed with further tenders. All of these should be out within the first semester of 2006. Our tenders are not open invitations to lease land and then to do whatever you like there, but to lease a particular facility for a particular purpose. By Greek standards, these leases will be very long: in our country, there is no real experience of leases going beyond thirty years; in our case, we go up to forty-five or so years.

Due to their nature, we do not intend to transfer the rest of the venues wholesale to private concessionaires. Thus, the company and the state will remain in immediate control of the remaining facilities, which will be used in full or in part for public purposes: to house ministries or educational establishments, for sports activities, etc.

Note that the Olympic facilities were constructed as public works of the Greek central government, because the Municipality of Athens did not have the capacity to support the cost; accordingly the central state picked up the bill. The facilities were completed just in time for the Olympics and on the basis of Olympic-event-related specifications, not according to the specifications of the construction contracts. The various contracts required the construction companies to build a facility, to convert it for Olympic use by means of overlays, and then to remove these overlays and complete the works, in order to bring the facilities up to their final contractual description. Therefore, even today, many of these facilities have not been formally commissioned. Thus, even though we wanted to install final users as soon as possible, many things had to be resolved beforehand. We have now reached the point where the commissioning of the buildings has almost been completed, and we can transfer several public-purpose facilities to their end users.

A related problem was that many of the buildings were designed with the Olympic function in mind, without proper consideration of the post-Olympic use; this was a major mistake. Accordingly, there is further complexity, not only because the public works continued after the Olympics, but also because the completion of the public works does not necessarily mean that these facilities are now ready for their permanent use, since that use was not reflected in the original construction contracts.

Resolving all these complexities takes time; but we are moving ahead, and in the next few weeks some of the facilities will be handed over to the end users. In the meantime, we have used the facilities for many events, and have made some money as a result.

PM Communications: We are aware that the first five tenders to manage Olympic installations met with an enthusiastic response. Could you tell us more about the progress that has been made?

Dr. Hadjiemmanuil: Early on, we reached a decision concerning the international profile of the country and the approach of this government and this company. The country attracts plenty of portfolio investment; historically, however, it has not performed particularly well in terms of FDI. In fact, 2004 and 2005 were exceptionally weak in terms of FDI. We want to reverse this situation. This has become a high priority under the new government. As our venues are already highly visible and widely recognised, they present an excellent opportunity for the country: the Olympic facilities attract attention simply by being Olympic. If you have in a full page in a financial newspaper announcing a tender for an industrial complex in Kazakhstan, some real estate in Romania, commercial properties in Germany and an Olympic facility, people will automatically notice the Olympic facility ahead of everything else! Thus, our tenders can be used as pilot projects, to get across the new image of a business-oriented country, eager to achieve, open and friendly to foreign entrepreneurship. Thus, we decided to advertise our tenders, even those concerning relatively modest venues, in the international business press. We will also advertise the results of the tenders. We did not necessarily expect that foreign investors would be attracted to the country simply because of our ads, but we thought that this was a good means of making a statement about the way the country is moving.
In other words, our purpose in advertising our tenders internationally was dual: to the extent possible, we wanted to attract foreign investor interest for the immediate projects, thus ensuring more open competition and, accordingly, higher returns; simultaneously, and regardless of whether foreign investors would eventually participate in a particular tender, we wanted to inform them that various significant real-estate projects are under way in Greece, and that these can be completed successfully within reasonable time frames. We want the international community to know that in summer 2005 the Greek government initiated a cycle of tenders for the Olympic facilities and a few months down the line the tenders are completed, and private consortia have taken up this or that facility, with a view to developing them into something significant in terms of investment or operations. This will be concrete proof that things are moving ahead, and will leave an indelible mark in the perceptions of investors.

The government has also turned this company into an experimental tool in relation to the licensing of public premises. The act on the post-Olympic uses of the facilities introduces an exceptionally streamlined licensing regime. Without changing anything of the substance of the applicable laws and regulations, it nonetheless concentrates all the licensing powers in the hands of a single committee, where each of the various existing licensing authorities is represented. In this "one-stop shop" you can therefore get a single licence covering all aspects of an Olympic site's operation. This is a bold deregulatory move; it reduces significantly the time necessary for licensing and the opportunities for judicial challenges. Instead of numerous licences, each of which can be challenged separately, there will now be only one comprehensive licence, which can only be challenged within a couple of months. In this way, a lot of legal risk is eliminated. We realise that legal risk and uncertainty has been a major barrier to investment in our country; this explains why, in the past, people were willing to engage in portfolio investments, but very reluctant to start up new businesses or invest directly. This must change, and is changing.

PM Communications: The Greek government is already beginning to share its experience with the London Organising Committee ahead of 2012 Olympics. What lessons can you share with the London team?

Dr. Hadjiemmanuil: I have seen the plans for the London Olympics. They have thought very thoroughly through the whole process, from the phasing-in to the phasing-out. They will rely much more on provisional facilities, to reduce costs. They seem to have a very detailed plan of steps to be taken between 2005 and 2012, as well as for the post-Olympic phase, with a series of gradual interventions.

We can certainly share with the London organizing committee our experiences concerning security issues, logistics, sports management, etc. They can also learn from our company's experience in building and then using facilities. But it would appear that they have already learned the main lessons of our pre-Olympic mistakes. Moreover, you cannot simply transfer wholesale the experience of one country or city into another. Cities have very different geography and demographics. Barcelona and Athens are already very different from one another; but imagine Sydney and Athens! Land is not a problem in Sydney, and they were building facilities for a much smaller population both in terms of residents and visitors. In Athens, there is a much larger concentration of people. Australia may be more populous than Greece, but its inhabitants are dispersed across a whole continent. Demographics do change the picture tremendously. Also, some cities already possess very good infrastructure and large-scale public facilities; others, don't.

Overall, for Athens the Olympics were a mixed blessing, because of the bad pre-Olympic planning for the post-Olympic situation. The facilities cost much more than they should because of a failure to keep costs under control, and also because they were larger than they needed to be. But now these same facilities provide poles of opportunity for the new Athens precisely because they were lacking before and because they are so big.

PM Communications: When you took on this post were you aware of how high profile the position would become? Did you appreciate the full symbolic value of your portfolio?

Dr. Hadjiemmanuil: No, I had no real sense of the intangible value of these properties. Re-branding the country is exceptionally significant, but you need to have successes to support the new image. Up till now, we have had some concrete successes, but we need to sustain this effort. You cannot fail to live up to your promises time and again; accordingly it is not enough to simply project an image. It is essential that you validate this image continuously over a period of time, until people are fully convinced that the image reflects the truth and they have internalised the new brand. In this sense, the battle has not yet been won. It is ongoing, and we need to carry on and sustain the effort. If we simply lay back, thinking that we have made it, it will turn into a disaster and all this huge investment in money and past efforts will have been for nothing. Accordingly, it is absolutely essential that we keep up the reform pace.

PM Communications: And this is especially true in terms of the Olympic Properties.

Dr. Hadjiemmanuil: Of course! But if five years down the line these properties are still out of use, then all the intangible value and all the glamour will have been lost! So, it is necessary for us to proceed rapidly and decisively. The properties must be transferred to their final users, whoever these may be, as soon as possible.

These properties give an incredible opportunity to regenerate and re-orientate Athens and the other cities that hosted Olympic events. For its pilot study seeking to apply in Greece the concept of regulatory impact assessment of new laws, the Confederation of Greek Industries (SEV) selected the bill on the Olympic properties, since this happened to go through Parliament at the time. They conducted a relatively large-scale study of the likely impact of the new law and the new land uses and carried out a cost-benefit analysis. The results were far better than we expected. They calculated that the fifteen complexes in our portfolio would add ten to fifteen thousand new jobs, and would generate new economic activities to the tune of Euro 150 to Euro 500 mln per annum, or up to 0.3% of GDP. If you take into account that we are talking about a handful of properties, then you realise the incredible impact they could have at the local level. I hope that we live up to SEV's expectations; but even if their predictions prove to be on the optimistic side, we are confident that the new legal regime will still be a success and our choices will prove right. Facilities that could cost the Greek state millions upon millions to maintain will not only become viable, but will also contribute to the general economic development of Athens.

PM Communications: Do you feel supported in your work by public opinion?

Dr. Hadjiemmanuil: Greek public opinion has moved a long way. Generally, people were very sceptical about transferring the management of all or some of the Olympic facilities to the private sector. Now, we only hear, "Why don't you move faster?" This is the result of incremental change. The Greek public has had a complete change of heart. The people now believe that it was right to expand the land uses and to decide that the facilities would not be left as sports facilities where other events happen occasionally. They agree that many venues must be transferred to private management, so that they can be far more efficiently managed and function as vehicles of economic development, whilst also providing a much better quality of service to the public. This shift is evident from the type of criticisms we receive from the press, as well as from public opinion surveys. In this sense, I am exceptionally happy with the results of our efforts. I feel gratified that people have accepted in principle the choices that we have made. Even if we were to leave office tomorrow, something similar to our choices would be implemented.

Dr. Hadjiemmanuil: The facilities that will be placed under private management include very important and desirable properties. For instance, Agios Kosmas is one of the largest marinas in the Mediterranean - an incredible property- and one of the few seafront locations in Athens that has not been split up into small parcels, but forms a contiguous landmass that will become one of the key attractions for leisure and entertainment bringing in high-end marina users.

There is also the canoe-kayak facility, a tremendous water park, the like of which you will not find in the broader region. We hope that it will also continue to host one of the rounds of the international canoe tournament there. Then we have the convention centre, a nice summer theatre overlooking the Faliron at the old beach-volley facility. These are things that will be visited by tourists for entertainment, culture and even business and at the same time, a lot of these facilities will be great for local people.

Outside Athens, in Heraklion in the island of Crete there will be a major development, in a city that is built directly on the seafront but its access to the sea is interrupted by an old port. So on the Western side where our football stadium is situated, we want to use the adjoining land for a seafront development that will be very attractive as a leisure and entertainment facility both for visitors and local people.

PM Communications: It is also interesting for our readers to discover more about those personalities that our transforming the country where we are working. We know that when you took this job you had a choice between becoming a high-ranking, international civil servant as an IMF consultant or to come back to your own country and take on a very challenging position. What influenced your decision to come here?

Dr. Hadjiemmanuil: I was at the London School of Economics so by profession I am an academic. I read law at LSE and I have spent the best part of my adult life in London. I have also spent a short period of time working for the IMF, as an outside consultant. For me, it was a choice between a career in law with an international organisation or academic institution, or doing something for my country. I have kept my academic post and I am perfectly aware that this is a political appointment and, as such, not a permanent one. This company has a single shareholder, the Greek state. This is by nature a transitional job, both for me and for the country - this company will not serve the same purpose in five years time, when the future of the Olympic venues will already be settled. But right now we are managing the transition to the post-Olympic period. It is a challenging time and I am enjoying the job thoroughly, though I do look forward to returning to teaching in London.

PM Communications: This is a highly symbolic company and something of an experiment in terms of policy. Putting finances aside, what other legacy would you like to leave behind when you move on from this position?

Dr. Hadjiemmanuil: I am pleased to be one of the people participating in a wider reform programme. It is high time that the Greek nation moves on and changes certain habits that have held the country back for a long time. I will be happy, firstly, if we manage to implement all of our plans for the Olympic properties in a reasonable time frame and, secondly, to play a small part in the overall reform puzzle. That would be more than enough to consider my time here a success. I would be very happy to recall my period in office as applied policy making. The job is far higher profile than I expected it to be, and it is gratifying when people taking notice of what are you doing. Doing a job which nobody notices can be nice; but doing a job where a lot of people notice, is even better! I am in a much more influential position than the actual portfolio of properties justifies. The allure of the Olympics gives my post a kind of intangible leverage!