October 3, 2017 / 10:03 AM / a year ago

Greece overcomes forestry setback to develop Athens coastal resort

ATHENS, Oct 3 (Reuters) - Greece has won an appeal over objections from forestry officials to a major tourism project in Athens that forms part of its third international bailout, overcoming one of the obstacles to turning the site into one of Europe’s biggest coastal resorts.

Greece’s international creditors from the European Union and the International Monetary Fund are closely watching developments over the project to develop the disused Hellenikon airport site.

The 8 billion euro ($9.39 billion) project features prominently among privatisation targets in the country’s 86 billion euro aid package.

Greek developer Lamda signed a 99-year lease with the state in 2014 for the 620-hectare area, once the site of Athens airport. But the project has faced delays, partly over a long-running row between developers and those who fear it will destroy the environment.

Forestry authorities in May declared 3.7 hectares of the estate as protected woodland, on a spot developers said was integral to the project.

Greece’s privatisation agency, which is in charge of concluding the deal with Lamda, had appealed the decision. A four-member panel of the country’s forestry department ruled on Monday that the plot is not forest.

“The agency’s appeal...was upheld by a 3-to-2 majority,” the committee’s president Christos Antonellis told Reuters, adding that the decision is expected to be published by Wednesday.

The decision is subject to appeal.

The privatisation agency’s chief Lila Tsitsogiannopoulou said the decision was “positive” and that the agency’s appeal had strong legal grounds. The Hellenikon project has become a major political issue in Greece which is slowly emerging from a multi-year debt crisis. Prime Minister Alexis Tsipras, whose leftist party strongly opposed it before coming to power in 2015, is seen as keen to now implement the deal to help boost economic activity and reduce unemployment, the eurozone’s highest.

Backed by Chinese and Gulf investors, Lamda submitted its detailed development plan for Hellenikon in July. Objections by archaeologists who worry that the investment will hurt Greece’s cultural heritage is another hurdle Greece now needs to overcome.

The government’s top advisory body on the protection of antiquities, the Central Archaeological Council, was scheduled to meet again on Tuesday to discuss the matter. There have been three previously inconclusive meetings in recent weeks. ($1 = 0.8522 euros) (Reporting by Angeliki Koutantou, editing by Louise Heavens)

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