The way the modernisation of Greece’s railways was carried out is being investigated by the European Public Prosecutor’s Office, headed by Laura Codruța Kovesi, who has also indicted 23 suspects.
The European Public Prosecutor’s Office (EPPO) in Athens (Greece) has charged 23 suspects, including 18 public officials, with offences related to the execution of contracts for the modernisation of remote traffic control and signalling systems on the Greek railway network, co-financed by the EU, according to a statement issued by the Public Prosecutor’s Office.
Started on 28 November 2022, the EPPO investigation focused on contracts for the modernisation of remote traffic control and signalling systems on the Greek railway network signed between ERGOSE – a subsidiary of OSE, responsible for contract management – and the contracting consortium, made up of two companies, responsible for project execution. The evidence collected led to the indictment of 23 suspects, namely:
- 14 ERGOSE civil servants, accused of subsidy fraud. Two of them are also accused of false certification in order to obtain an unfair advantage for another person;
- 4 public officials of the Greek Managing Authority of the EU Operational Programme for Transport Infrastructure, Environment and Sustainable Development (EYD/EP-YMEPEPAA), accused of misappropriation of funds;
- 5 legal representatives and employees of the contractor, charged with instigating subsidy fraud and instigating false certification in order to obtain an undue advantage for another person.
The charges relate to the execution of a contract for the modernisation of the remote traffic control and signalling system of the Athens-Thessaloniki-Promachonas railway section, signed in 2014 and due for completion by 2016 – known as “Contract 717”.
Another contract was signed in 2019, changing the original scope of Contract 717. The additional contract called for the construction of a completely new signalling system with new telemetry units to enable communication and data transmission between train stations and from train stations to control centres. Both contracts were co-financed by the EU Cohesion Fund under the programme “Modernisation of the signalling and telecommunications system and installation of the European Train Control System (ETCS)”, with an EU contribution of 85%.
Irregularity after irregularity in Greek railway modernisation
On the basis of a private agreement, the two companies that were part of the consortium arbitrarily divided the project between them immediately after the 717 contract was signed. One of the companies undertook to carry out the northern section of the project, while the second company undertook to carry out the project on most of the Athens-Thessaloniki route up to Platy, including the section near Tempe, where a serious railway accident occurred on 28 February 2023.
In addition, the second company entrusted the technical studies of the signalling systems of the Athens-Platy section of the railway to a third company, which did not have the necessary specific technical expertise – in breach of the terms of the contract, which stipulated that the expertise was to be carried out by a specific provider. This led to a breach of the contractual obligation to provide specialised expertise, for which a financial penalty of around EUR 2 million was imposed on ERGOSE, following an audit carried out in 2018 by the Financial Audit Committee of Greece (EDEL).
According to the investigation, a total of seven illegal extensions to the original contract were granted in accordance with ERGOSE’s Board of Directors’ decisions. As a result, the project has still not been completed, more than nine years after the 717 contract was signed. Prosecutors allege that ERGOSE employees responsible for managing the project intentionally declared incomplete and false information to the managing authority about the existence of facts essential to the distribution of funds and approval of the extension. As a result, the claims were approved by the managing authority, which disbursed the funds to the beneficiary, ERGOSE, which subsequently paid the consortium contractor.
In addition, according to the investigators, the managing authority officials responsible for supervising the use of the funds acted in breach of the principles of prudent asset management. It is understood that, despite the fact that the information provided by ERGOSE employees was obviously inaccurate or false, the public officials of the managing authority approved the distribution of the corresponding funds, causing damage to the financial interests of the EU and the Greek State amounting to more than EUR 15.6 million.
The offences for which the defendants are charged are punishable by up to 10 years’ imprisonment, together with a fine.
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