Euroasia legal action ‘will not delay’ Crete interconnection

Legal action allegedly taken by Euroasia Interconnector against RAE, Greece’s Regulatory Authority for Energy, for its decision to grant the power grid operator IPTO control of the development of the Crete-Athens electricity grid interconnection will not affect the project’s progress, energy minister Giorgos Stathakis has told reporters when asked to comment.

Euroasia Interconnector, a consortium of Cypriot interests, heads a wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project. IPTO has taken control of the project’s Crete-Athens segment and established an SPV subsidiary, Ariadne Interconnector, for its development.

Euroasia Interconnector has apparently filed a case against RAE at a Greek court and also submitted an official complaint to the European Commission for infringement of PCI regulations, according to reports. This latter move could pave the way for a  European Court hearing.

RAE has not been informed of any legal action taken by Euroasia Interconnector, officials at the regulatory authority contended.


PPC units sale close to failure, call for improved sole valid offer

The main power utility PPC’s bailout-required sale of units at Meliti in Greece’s north and Megalopoli in the south could end up being half successful, at best, but a full debacle is considered most likely, the disclosure of binding bids submitted yesterday, the sale’s deadline day, has indicated.

Sale authorities have requested an improved bid from just one participant, the Mytilineos group, for its offer concerning the Meliti facility, while another offer made by Seven Energy and Terna for Megalopoli has apparently been rejected as it does not meet the tender’s terms, energypress has understood following a thorough cross-examination of incoming information.

According to one of Greece’s bailout commitments, based on a European Court verdict, the sale effort requires a disinvestment representing 40 percent of PPC’s lignite capacity. Meliti I and II and Megalopoli III and IV need to be sold if this disinvestment target is to be achieved.

PPC has suggested it will strive for an imminent follow-up sale in an effort to honor the European Court disinvestment decision. If this is permitted, problems that have made the current sale unattractive to investors will need to be resolved. The current composition of the Megalopoli package, in particular, is virtually unsellable, investors agree.

PPC remains determined to achieve decent sale prices for Meliti and Megalopoli, despite the fact that both facilities have been assessed as loss-incurring by investors. In recent comments, the power utility’s chief Manolis Panagiotakis noted that PPC is “selling not selling out.”

PPC, troubled Larco reach deal, ministry to balk closure threat

Troubled nickel producer Larco has accepted terms set by the main power utility PPC including a production cutback of approximately 20 percent as a means of lowering its monthly electricity costs from a current level of 5.5 million euros to 4.1 million euros, regarded as manageable by the industrial producer.

The two sides, both state-controlled, are expected to sign their new electricity agreement within the next few days, no later than January 31. Requiring the approval of shareholders at both companies, the new agreement will enable Larco to continue being a recipient of electricity at favorable industrial tariffs.

Larco, which owes PPC over 300 million euros, has also committed itself to a 4.1 million-euro payment to be covered by customer-related cash inflow.

If the plan to limit Larco’s monthly electricity cost to 4.1 million euros fails as a result of extraordinary cost increases, such as a sharp rise in CO2 emission right costs, then the nickel producer will need to provide letters of guarantee, updated monthly, according to the new PPC-Larco agreement.

On a negative note, Greece, as of yesterday, faces a new state aid challenge that threatens to take the country to the European Court if Larco does not return 135.8 million euros to the state within two months, by late March or early April. The amount is currently unavailable. Greece will need to return this amount to the EU or face hefty fines and financial sanctions.

Continuing to favor a state-controlled version of Larco, the government and energy ministry can be expected to try and buy as much time as possible for the return of the 135.8 million-euro amount and extend the matter to May, at least, with the objective of keeping the debt-laden nickel producer afloat ahead of national elections, due later in the year.

The government wants to avoid any political fallout of a company closure that would lead to 1,200 or so job losses.



Union cites PPC employee asset rights in European Court case

Genop, the power utility PPC’s main union, has resorted to an older argument used as an attempt to stop the split and sale of power grid operator IPTO, a former subsidiary, by citing PPC employee asset ownership rights in an effort to delay the bailout-required disinvestment of PPC lignite units and mines, representing 40 percent of the power utility’s overall lignite capacity.

The union, in a case prepared for the European Court, contends that PPC employee and retired personnel asset ownership rights have been incorporated into the company as a result of social security contributions withheld by PPC.

Genop used the same argument, more or less, in a case filed about a year ago to the European Court against the sale of 24 percent stake of IPTO to the State Grid Corporation of China (SGCC). Though the European Court has yet to deliver a verdict on the matter, neither the IPTO sale nor its operation under an entirely new ownership set-up, were obstructed.

Genop was encouraged to also resort to European Court action against the PPC disinvestment obligation as the union is counting on the pending IPTO-related verdict.

The union group is basing its worker asset co-ownership rights case on an agreement reached in 1999 between the then-Development Ministry and Genop over social security issues for personnel ahead of PPC’s bourse listing.


Genop legal action threatens SGCC deal for IPTO’s 24%

The state-controlled power utility PPC’s main union group Genop, reacting against a split-and sale plan for the subsidiary power grid operator IPTO, now in progress, is taking legal action against the Greek State at the European Court of Human Rights in Strasbourg in an effort to protect worker ownership claims to company assets.

The union group intends to argue that no reference was made to these alleged ownership rights by the Greek State when IPTO’s 24 percent was placed for sale as part of a bailout-related plan.

Genop believes PPC workers possess ownership rights to PPC assets as a result of social security fund contributions made over the years.

China’s SGCC (State Grid Corporation of China) has agreed to acquire a 24 percent stake of IPTO. Ultimately, the legal action taken by Genop comes as a direct challenge against SGCC’s agreement for IPTO’s 24 percent.

The sale is approaching finalization. A 25 percent stake of IPTO still needs to be transferred to the Greek State, which, according to the split-and-sale plan agreed to by the government and the country’s lenders, will end up with a 51 percent stake of IPTO. A holding company carrying the remaining stake also needs to be listed on the bourse.

If Genop’s case against the Greek State is accepted at the European Court of Human Rights, then such a development would delay the tight IPTO sale schedule and trigger a clause included in the agreement with lenders for IPTO’s sale in its entirety.

Taking into consideration the possibility of IPTO being sold entirely, certain Genop sub-groups have refused to officially support the union in its decision to resort to legal action.


PPC union to take legal action against looming unit sales

The power utility PPC’s main union group Genop, reacting to prospective bailout-required utility production unit sales and a split-and sale plan for the subsidiary power grid operator IPTO, now in progress, intends to start off its European Court action next week by filing a case to the Strasbourg court as a challenge against the IPTO sale.

The union group also plans to eventually take legal action against a bailout plan entailing the sale of PPC production units, details of which are still in the process of being formulated.

However, it is presumed that Genop will first wait for the results of a market test to be staged in September as a means of measuring investor interest in the PPC units. The test’s results will help determine which PPC units will be placed for sale. Subdued buyer interest in PPC’s lignite-fired stations will lead to the addition of hydropower stations to the package.

When the overall picture is clearer, Genop will initiate its challenge of the PPC unit sales at the Council of State, Greece’s Supreme Administrative Court, and, if needed, then take its case to the European Court.

The Council of State has already rejected – with a 10-7 vote – a Genop challenge of the IPTO sale, which is why the union group is expected to take this case to the European Court next Tuesday.

The union group’s leadership will meet today with energy minister Giorgos Stathakis in provincial city Kozani, northern Greece.

The minister, who only recently accepted lender demands for the sale of PPC production units, is visiting the country’s north as the prospective sale of utility units is a sensitive issue in the wider region. The bulk of PPC’s lignite-fired power stations operate in northern Greece.

Returning to Genop’s decision to take legal action, the union, knowing that European Court verdicts take a considerable time to be delivered, hopes this anticipated delay will make prospective investors thing twice before proceeding with any PPC unit acquisitions.

In its legal action, the union is expected to claim that PPC workers possess ownership rights to PPC assets as a result of social security fund contributions made over the years, from the time of the corporation’s establishment in 1960 until 2001, when the utility was listed on the bourse.

In the meantime, as a first step, the union is expected to orchestrate protests, strikes and occupations of utility units. The legal action will come as the union’s second stage of action.

Though not publically discussed, a third step, if Genop fails to block the PPC unit sales, will entail talks with the new power production unit owners as an effort to protect jobs.