A 7.9 billion euro plan to turn a derelict former Athens airport into one of Europe's biggest coastal resorts, included in Greece's latest international bailout, will go ahead despite recent delays, a senior privatization agency official said on Saturday.

Under the deal signed in 2014 and revised last year, investors lead by Lamda Development will pay 900 million euros for a 99-year lease to turn the Hellenikon site, a wasteland of decaying terminals and rusting airplanes, into a seaside town of hotels and residences. That project is expected to cost 7 billion euros.

Lamda, which will be backed by China's Fosun and Arab funds, had hoped excavations at the site would begin in the first half of the year. But the investment has been delayed due to licensing hurdles.

"A project where [privatization agency] HRADF has been involved since 2012 has faced problems and delays. But we believe that we are at the final stage so that it can be set in motion," the agency's executive director Lila Tsitsogiannopoulou told an economic forum in Delphi.

She said that all parties involved have been working together to sort out the remaining issues.

Privatizations have been a key plank of Greek international bailouts since 2010, but have reaped only 4 billion euros so far versus an original target of 50 billion euros due to political resistance and red tape.

"We are not dreamers but there is a glimmer of optimism at HRADF because we meet interested investors everyday and we see our projects moving ahead," she said.

[Reuters]