Economic policy council set to endorse energy privatizations

Prospective privatizations regarded as forbidden territory by the Syriza-lead coalition, such as a 17 percent sale of main power utility PPC, are included in a list of 19 privatizations which the government’s economic policy council (KYSOIP) will soon need to endorse, without any exceptions.

This bailout-required move is expected to seriously test the limits of many government officials. The Asset Development Plan (ADP), updated on April 26, will be forwarded to the council for approval, probably within the next few days, carrying the entire privatizations list assembled by TAIPED, the State Privatization Fund.

Besides PPC, all other energy-sector firms listed for privatization, including DEPA, the Public Gas Corporation (65%), ELPE – Hellenic Petroleum (35%), EYDAP – Athens Water Supply and Sewage Company (24%), EYATH, the Thessaloniki Water Company, and ELTA, Hellenic Post, are among the 19 privatizations.

This bailout demand could unsettle the balance between opposing forces within the Syriza party’s ranks and ultimately lead to disunity.

It will be interesting to see how energy minister Panos Skourletis handles the challenge. Speaking to a group of accredited journalists on March 31, he strongly supported that no additional energy-related privatizations were being planned, beyond a list of nine. For quite some time now, Skourletis has obviously been fully aware of the precise content on the ADP list, which explains his harsh attack on TAIPED a few months ago for privatization-related leaks.

Though making predictions is difficult, the government will most likely seek to avoid near-future privatizations for cases that had been cordoned off by the Syriza party during the pre-election period. These included PPC and the Athens and Thessaloniki water utilities.

Chances are the government will seek to negotiate referencing PPC’s 17 percent for future sale on the grounds that Greece’s electricity market is currently being reshaped, developments including a plan for PPC to establish partnerships with private-sector investors. These partnerships will need to acquire specific shape before any renegotiations on PPC’s stake to be sold can take place.

However, critics could argue that any prospective progress on the PPC partnerships front would reduce the utility’s market share but not the State’s stake in the company. In other words, a contraction of PPC’s market share has nothing to do with the procedure to reduce the State’s current 51 percent stake in the utility by 17 percent to 34 percent.

The country’s international lenders may end up agreeing to delay the privatizations of politically sensitive cases. Even so, these would be a small number of isolated cases.