PPC market test concerns to be worked into unit sale draft bill

The concerns of investors considering taking part in the main power utility PPC’s bailout-required sale of lignite units are focused on two issues, one being the utility’s Megalopoli III and IV units, especially staff numbers, believed to be excessive, and the other, pending license issues linked to mines intended to supply Meliti I and, later on, Meliti II, once this latter facility is developed.

These concerns were highlighted by the results of a market test conducted by the European Directorate for Competition and delivered to Greece’s energy ministry late last week.

The DG Comp comments do not go into great detail but represent a basis for further discussion, according to energypress sources. A teleconference to involve energy ministry and DG Comp officials is being planned for this week, the sources informed.

Prospective investors are believed to have also expressed concern over the future of lignite, noting PPC’s sale package would be more atttactive if hydropower plants were included.

As for the overstaffing issue at PPC’s Megalopoli III and IV units, the market test participants are seeking details on the legislation to be drafted for 1,100 staff members currently employed at the power station.

Prospective investors also enquired about the current state of PPC’s transmission network.

Following this week’s teleconference between energy ministry and DG Comp officials, the Greek government will need to incorporate any required revisions into a draft bill concerning the PPC lignite units sell-off.

Then, Greek authorities will need to deliver a final commitment to the DG Comp before ratifying the bill in parliament. This is expected to take place next month ahead of an announcement of a tender early next summer.

Greek authorities have already begun working on the PPC sale’s draft bill, whose articles offer a description of PPC lignite assets to be placed for sale as well as details on the sale procedure.

Two sale packages, a northern and southern package, will be offered to investors. The northern package will include Meliti I and the Meliti II license. The southern package will include Megalopoli III and IV.

The draft bill’s article on labor issues is expected to include previous conditions set for an older but unexecuted 17 percent sale plan for PPC, locally dubbed “Little PPC”. These terms included conditions requiring buyers to maintain a large majority of jobs at any units sold for at least five years.