Greece: Litton Takes Charge

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Zorba the Greek was a splendid hero, but when he tried his hand at lignite mining he was a disaster. That's the way economic things go in Greece, a country that has an annual per-capita G.N.P. of only $530 and ranks as one of Europe's least-developed areas. Hoping to change that situation at long last, the Greek government has now turned to a more modern type of hero for a helping hand: California's versatile Litton Industries, Inc.

Litton has been asked to plan and largely supervise an $830 million program to develop tourism, industry and agriculture in the western Peloponnesus and on Zorba's own picturesque island of Crete. A contract signed last month makes Litton the consultant and fund raiser for the first $240 million and 3½ years of the program, with management of subsequent projects to be decided later.

For Crete, Litton's plan includes raising tourist capacity from 60,000 to 620,000 people, irrigating 60,000 acres of the Messara Plain, developing mines and industry so as to increase employment by 72%. In the western Peloponnesus, Litton proposes that Greece increase the number of hotel beds from 1,000 to 50,000, build three new airports, develop five industrial centers and five harbors, and transform Olympia into some sort of Greek Disneyland.

Profitable for Both. Greek leaders admitted that, left on their own, they just could not do the job. But it took a military coup to end more than two years of negotiations and political bickering over the terms of the contract. "We're not just altruistic businessmen," says a Litton executive. "We hope to make it profitable for them and for us. If we are successful, it will improve the standard of living in Greece, it will bring us more income, and in the end it will mean more business for us."

Litton opened its Athens headquarters this week, ready to work on a cost-plus-11 % fixed-fee basis (costing Greece some $3,000,000 a year) and a 1.9% to 2.5% commission on capital it raises for the program. This would come to less than one-quarter of 1% of Litton's sales, which amounted to $1.2 billion last year. But the Greek venture could be a pilot for applying Litton's systems engineering to similar projects abroad. Already in the works: a deal with Lisbon for joint development of Alentejo, a region in central and southern Portugal. Says Litton Chairman Tex Thornton: "We're using Greece and Portugal as sort of guinea pigs."