The bailout-related requirements for state-controlled main power utility PPC, well behind on market share contraction targets and, consequently, facing prospective unit sales, are far bleaker than is being portrayed by government officials.
Governing Syriza party MPs representing seats in northern Greece’s western Macedonia region, who oppose utility unit sales, emerged from a meeting yesterday with energy minister Giorgos Stathakis declaring that not a single unit would be sold. The minister met with the MPs to updated them on the energy-sector developments at a meeting with lenders in Brussels several days earlier.
The defiant words by the MPs were presumably aired to avoid further anger among the utility’s union members and secure more political time for the Syriza-led coalition, holding a slim majority.
In actual fact, the minister updated his MPs on the hard facts resulting from the Brussels talks. He slightly sweetened the pill by noting that the government, in exchange for accepting the PPC unit sales demand by lenders, intends to remove a 17 percent stake of PPC from the TAIPED (State Privatization Fund) privatization list and transfer it to a superfund that would protect this sale until further notice. This 17 percent share is currently included in the Greek State’s 51 percent majority stake of PPC.
However, at a meeting earlier in the day, finance minister Euclid Tsakalotos informed TAIPED officials that PPC’s 17 percent would remain on the fund’s privatizations list, finance ministry sources informed energypress.
As things currently stand, old and new PPC lignite-fired power stations will be put up for immediate sale. If the utility’s market share is deemed to have not contracted sufficiently then hydropower stations will also be added to the sales package. It appears that the government, engaged in prolonged negotiations to conclude the bailout’s second review, will be given nothing in exchange by the lenders.
An even tougher stance by the lenders cannot be ruled out. A plan for the sale of a 40 percent proportion of PPC’s lignite and hydropower production capacity may be retabled. Whether this demand will be added to the overall requirements set by the lenders could be determined within the next few days.
The odds are against PPC, facing a review of its market share contraction progress this June. The utility needs to shed 13 percent – from February’s share of 88.5 percent – by December to reach an end-of-year target of 75.24 percent.