Lenders consider minister’s demand for state control of gas networks

Government officials are cautiously optimistic over the prospects of an alternative DEPA gas utility privatization model following initial fourth-review bailout talks yesterday between the energy minister Giorgos Stathakis, the proposal’s architect, and the country’s lenders.

Local officials believe a crucial first step has been taken as the alternative plan is still on the negotiating table.

The ministry is pushing for the adoption of a privatization model that would enable the Greek State to maintain control of the country’s natural gas networks owned by DEPA.

The Greek State’s control of networks stands to be increased once DEPA finalizes a takeover agreement with Shell for the latter’s 49 percent stake in their EPA Attiki gas supply and EDA Attiki gas distribution companies covering the wider Athens area. DEPA currently holds 51 percent shares in these ventures.

The government is expected to privatize 65 percent of the gas utility. The alternative DEPA privatization proposal has prompted some reservations among the lenders as a result of its degree of complexity.

The minister appears willing to also pursue other solutions, such as one entailing the establishment of two subsidiaries, one representing DEPA’s networks and the other the firm’s commercial division, as long as the Greek State is ensured control of the networks.

The lender representatives, it became evident during yesterday’s meeting, are primarily concerned if the budgeted DEPA privatization amount can be achieved through alternative sale models and whether these can be implemented in the limited time available. The government firmly believes its alternatives can be successfully applied on time.

Intensive negotiations with the lenders will continue until a solution is found by Saturday, Stathakis told reporters following yesterday’s opening session.

The Greek State’s continued control of network infrastructure and other nationally strategic assets stands as a core principle of the Syriza-led coalition’s policies. This was highlighted in the details of the recent sale of a 24 percent stake of the power grid operator IPTO to China’s SGCC. Also, the Greek State has secured a dominant role in the hydrocarbon exploration and utilization domains concerning ELPE (Hellenic Petroleum). A 50.1 percent stake of the petroleum company is being offered to investors.