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Thu 22 Sep 2016 09:27 AM

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Greece ratifies $1bn lease of disused Athens airport to private investors

Abu Dhabi-based real estate firm Al Maabar part of consortium to invest in project

Greece ratifies $1bn lease of disused Athens airport to private investors
An aerial view of the now abandoned Hellenikon Airport in Athens. (Getty Images)

Greece on Wednesday ratified a 7 billion-euro plan to turn a derelict former airport into one of Europe's biggest coastal resorts, as agreed with international lenders as a condition of fresh bailout aid.

Proposals in recent years to transform the 620-hectare (1,530-acre) plot that was once Athens' Hellenikon airport have all fallen through. One abandoned plan was to create a financial district similar to London's Canary Wharf.

But the leftist Syriza government has pushed ahead with the deal to comply with the terms of a bailout of up to 86 billion euros which it agreed with the EU and the IMF last year.

The deal was backed by a majority of lawmakers in the 300-seat parliament on Wednesday.

Under the deal - which was signed in 2014 and revised earlier this year - co-investor Lamda Development will obtain a 99-year lease to turn the wasteland of decaying terminals and rusting airplanes into a glaring seaside town of hotels, residences and shops.

Backed by Chinese conglomerate Fosun, Abu Dhabi-based real estate firm Eagle Hills and other prospective investors, Lamda will pay 915 million euros ($1bn) for the lease.

It intends to spend about 1.5 billion euros to build a 500-acre greenspace park accessible to the public, a term which Finance Minister Euclid Tsakalotos called "a victory" for the government.

Lamda also plans to build roads and other infra  structure. A further 5.5 billion euros is being earmarked for homes, hotels and shops, the company has said.

The project, one of Greece's biggest private investments, is expected to help kickstart the country's economy after seven years of austerity-induced recession.

According to a study by Greek think-tank IOBE, the investment is expected to create tens of thousands of jobs in a country struggling with record youth unemployment.

Local communities and activists have long opposed the project, accusing the government of fire-selling "the last big real estate" in the wider Athens area. They say the project will harm the environment and harm struggling small businesses in the area.

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