Legisalation ratified two years ago with the intention of increasing government control of public sector contracts will affect the main power utility PPC’s degree of flexibility amid a competitive environment in which rival firms enjoy greater leeway as they go about their business dealings.
As a result of the law, PPC will be forced to confront a contradictory situation in which, on the one hand, it will seek to function as a public limited company amid a competitive business environment, while, on the other, observe this law’s time-consuming, highly bureaucratic, and costly requirements. Despite being listed on the bourse, PPC will need to adhere to the public sector contracts law.
According to PPC officials, the law (4821/2014) will significantly increase the utility’s costs and capital requirements, and also limit the corporation’s flexibility, jeopardizing the corporation’s fulfillment of fundamental obligations.
Interestingly, this public sector contracts law is neither the result of creditor representative pressure nor an EU directive. Instead, it emerged following an initiative taken by Greece’s finance ministry.
PPC’s purchasing procedures, already lengthy, will become even more complex and time-consuming as a result of the new law, noted Nikos Aravantinos, PPC’s general director for support operations. “Based on moderate estimates, the whole process [for each company purchase] will now take between nine and twelve months,” Aravantinos noted.
Concerns have been raised about the wider consequences, such as the delayed installation of equipment required to cover island needs during the tourism-heavy summer months.