Though still at a preliminary stage, the Greek energy ministry’s plan for PPC, the main power utility, to establish partnerships with private-sector enterprises is beginning to open up and widen as a prospect.
Yesterday, Evangelos Mytilineos, chief executive officer at the Mytilineos corporate group, declared that his group is open to the idea of forming partnerships with PPC, making it the second of the country’s three major independent players, following Elpedison, to do so. This additional interest promises to influence the overall balance of the plan’s developments.
The administration at PPC, up against the wall as a result of its rising level of unpaid receivables, and facing a bailout-linked obligation to reduce the utility’s market share to 50 percent by 2020, appears to have accepted the partnerships prospect as the least devastating of various options.
Not too long ago, PPC had refused to consider including its hydropower facilities in the package, but now appears willing, as a means of avoiding the worst – privatization procedures. An older part-privatization plan entailing the formation, split and sale of a slice of PPC – locally dubbed “Little PPC” – would be a far more complicated procedure. Also, Genop, PPC’s main union group, seems to have accepted the partnerships option.
Certain factors, including the European Commission’s ultimate stance, remain unclear despite the fact that EU officials have expressed strong consideration for energy minister Panos Skourletis’s PPC partnerships plan. Offiicals in Brussels know that the imminent NOME auctions, alone, will not prompt a serious market share reduction at PPC. (The NOME plan will provide third parties with access to main power utility PPC’s low-cost lignite and hydropower sources as part of the bailout-related obligation to help break the utility’s dominance).
Even so, the road ahead is long as the European Commission’s Directorate-General for Competition examines the Greek PPC partnerships proposal and, in doing so, seeks clarification of issues.
At this stage, it remains unknown whether the European Commission will consider the establishment of PPC partnerships without tenders. Also, in theory, PPC appears keen but may express various reservations once negotiations begin in earnest. In addition, the picture remains blurry as to which PPC units could be included in the partnerships plan and, crucially, who will be responsible for the number and type of units to be chosen. Finally, the possible equity make-up of PPC’s partnerships also remains unspecified, despite the fact that the energy minister has indicated private investors will be offered majority stakes of at least 51 percent and control of management.