Energy minister, privatization fund at odds over PPC’s 17%

Tension is intensifying between the energy ministry and TAIPED, the State Privatization Fund, fueled by the latter’s intention to take initiatives leading to the privatization of a 17 percent stake of main power utility PPC.

The feud was sparked by comments made by TAIPED’s president Stergios Pitsiorlas, as well as related rumors, all suggesting that the fund may soon hire a consultant to pave the way for 17 percent sale of PPC.

Over the past few days, energy minister Panos Skourletis has appeared increasingly angered by TAIPED’s intention, as has been made clear through a series of media comments, initially to energypress, last Friday, then in a newspaper interview published by Agora on Saturday, and yesterday, in comments to the Syriza-friendly Kokkino 105.5 FM radio station, during which the minister criticized Pitsiorlas for “pursuing a policy that deviates from the government line.”

Speaking in parliament yesterday, Skourletis admitted that a TAIPED action plan that included the sale of a 17 percent share of PPC had been endorsed by a government economic policy council earlier in the year but contended that, given the Greek electricity market’s latest developments, it would be pointless to sell an additional share of PPC. The Greek State currently holds a 51.12 stake in PPC.

“This once was a valid prospect for all parties interested in the electricity market’s liberalization, as the partial sale of PPC would have opened up the market,” Skourletis noted. “However, what is the point of further privatization now that private-sector electricity producers exist in the market, the retail market is being liberalized, and NOME auctions are on the way.”

The NOME auctions, expected to be launched in September, promise to provide third parties with access to PPC’s low-cost lignite and hydropower sources as a measure to help break the utility’s dominance.

Skourletis is also eager to avoid any turmoil at PPC, including union related, now that the tight-scheduled and bailout-required international tender for the sale of a 24 percent stake of the utility’s subsidiary firm IPTO, the power grid operator, is underway. Non-binding expressions of interest are due today. If the country’s international creditors deem that the procedure is not making satisfactory progress, then the entire IPTO will need to be put up for sale.

Barring unexpected developments, two European power grid operators, Italy’s Terna and France’s RTE, an EdF subsidiary, will submit non-binding expressions of interest. This privatization plan, engineered by Skourletis, intends to keep 51 percent of IPTO for the Greek State, while the other 25 percent will be offered to investors through the bourse.

Skourletis described the IPTO plan as ideal, adding that the same formula would have been applied to the sale of DESFA, the natural gas grid operator, had the Syriza-led government not inherited the previous conservative New Democracy-led coalition’s plan, entailing a 66 percent sale. The DESFA sale has has yet to be completed.