Gov’t, moving swiftly on IPTO deal, set to hire consultant

The Greek government, keen to convince the country’s lenders of its determination to proceed with the agreement reached for the new IPTO power grid operator, which will be broken away from parent company PPC, the main power utility, is moving at an unprecedently rapid pace, for local standards.

The country’s lenders have not expressed any doubts about the agreement for the future of IPTO, but they do remain unconvinced as to whether the government will implement the plan or hold back and delay the wider effort concerning the local electricity market’s liberalization for an end to PPC’s overwhelming market dominance.

The agreement reached clearly specifies that failure to adopt the latest plan for IPTO will bring back to the negotiating table the preceding option calling for the operator’s privatization, energypress sources informed.

According to the latest plan, IPTO will be broken away from PPC, its parent company, and a new IPTO company to be established will acquire PPC’s fixed assets (networks). The Greek state will acquire a 51 percent of the new IPTO company, while a 20 percent share will be sold to an international transmission system operator (TSO), and 29 percent will be made available to investors through the Athens bourse.

The government is moving fast as the schedule is tight. Preparations have already begun for the recruitment of a consultant to evaluate IPTO and offer specialized guidance for the electricity network’s breakway from PPC. Financial matters also need to be resolved. One of these concerns loans extended to PPC with fixed assets as guarantees.

The consultant is expected to soon be be hired, possibly between Christmas and the New Year, or no later than early January. Government officials are currently holding talks with a number of major consulting firms.

Once IPTO has been evaluated, a tender will be launched offering a 20 percent equity share of the operator to an institutional investor, as part of PPC’s compensation for the loss of its fixed assets.

Legal revisions also need to be made as an intial plan for the sale of a 66 percent share of IPTO had been legislated and is still valid. New legislation will need to be ratified for all matters concerning the operator’s split from its parent company, including details of the process, a time schedule specifying PPC’s compensation, and minority shareholder rights.

The IPTO agreement will most likely be finalized next spring. Reaction against the plan by Genop, PPC’s main workers union, appears to have been effectively managed by the government. However, PPC’s minority shareholders and funds have yet to show their cards. They have expressed serious reservations about the IPTO agreement.