No extra time for PPC units sale, advisor HSBC informs

Prospective buyers taking part in the main power utility PPC’s bailout-required disinvestment of lignite units will need to submit their binding offers by the sale’s current January 23 deadline, at 12 pm, the procedure’s financial advisor HSBC has informed, dispelling rumors of a new deadline extension, energypress has understood.

Even so, participants will most likely remain adamant and request additional time as a number of matters concerning the disinvestment remain unclear. These include the outcome of a voluntary exit plan for employees at two power stations, Megalopoli and Meliti, included in the sale, and PPC’s ongoing negotiations with the owners of the Ahlada lignite mine, feeding the Meliti power station, for a lower supply price and longer supply agreement.

A comprehensive post-bailout review of Greece’s reform commitments is currently in progress. Keen for approval from the country’s lenders for the ongoing PPC disinvestment, the government will avoid taking any initiatives that could make it accountable for any further delays of the sale effort.

PPC widens voluntary exit plan eligibility, limits food allowance

The main power utility PPC’s severance pay of 15,000 euros offered to employees agreeing to depart through the corporation’s voluntary exit plan will now also be made available to staff members who have been employed at the company for at least 25 years, not just older personnel eligible aged at least 62 and eligible for retirement, PPC’s administration has decided at a board meeting.

The measure, part of a PPC personnel restructuring plan prepared by the consulting firm McKinsey that includes more flexible labor terms for new and outgoing employees, incentives and staff redistribution, aims to lower the average age of the power utility’s workforce, currently numbering approximately 10,000, to less than 50, the current average age.

So far, the voluntary exit plan has been accepted by 273 employees at two lignite-fired power stations, Megalopoli and Melit, included in PPC’s bailout-required disinvestment of lignite units, as well as a further 220 employees at other divisions and units.

It remains to be seen if PPC will succeed in reducing its payroll by approximately 4,000 employees for cost savings of 330 million euros, as McKinsey has advised in its business plan for the Greek power utility.

As part of the corporation’s wider cost-reduction measures, the PPC board has also decided to reduce a food allowance offered to employees to 3.40 euros per day from its previous level of 6 euros per day over the next three years.

PPC lignite unit contenders up pressure, new deadline possible

Three contenders considering the main power utility PPC’s sale of its Megalopoli and Meliti lignite-fired power stations included in a bailout-required disinvestment of lignite units are intensifying their pressure on PPC for more favorable terms as the deadline for binding bids approaches.

In response, PPC has been eager to present any new favorable developments that have emerged from the implementation of incentives in an effort to support the sale’s conditions and price-tag potential.

This was demonstrated yesterday by chief executive Manolis Panagiotakis in comments to journalists.  He made reference to the results of a voluntary exit plan offered to employees at the Megalopoli and Meliti units, both loss-incurring. A total of 360 employees working at the two lignite-fired power stations have accepted the offer. Prospective buyers have indicated they want the workforce at Megalopoli and Meliti, totaling 1,248 prior to the voluntary exit plan, to be cut down to 600. PPC has just announced a voluntary transfer plan for Meliti and Megalopoli unit employees to other company posts.

Panagiotakis also noted PPC is negotiating with the owners of the Ahlada lignite mine, feeding the Meliti power station, for a lower supply price and longer supply agreement.

Reacting to the PPC chief’s comments, China’s CHN and the Copelouzos group’s Damco, one of the sale’s three potential bidding teams, described the results of the staff reduction effort at the two power stations as a good basis for cost reduction.

A consortium comprising the Czech Republic’s Seven Energy and Gek Terna has refused to comment. The Seven Energy firm has yet to present itself as a certain participant in the sale. In recent times, it has made note of narrow profit margins despite the voluntary exit plan, CAT remuneration uncertainties surrounding for the two units, and increased CO2 emission right costs.

Panagiotakis, the PPC chief, yesterday told journalists the Mytilineos group remains a contender for the Megalopoli and Meliti power stations. The Mytilineos group has not responded but, according to sources, remains troubled by what it sees as an unfavorable investment conditions surrounding the lignite sector, including the sharp rise in CO2 emission right costs.

Just days remain before the sale’s January 23 deadline for binding bids expires. An extension could be required as a result of PPC’s last-minute Ahlada mine negotiations and a Brussels delay concerning the European Commission’s position on Greece’s CAT remuneration mechanism proposal, a crucial factor for the lignite units sale.

 

 

PPC voluntary exit plan’s payroll cost savings estimated at €21.2m

The main power utility PPC’s voluntary exit plan offered to staff at the corporation’s loss-incurring Meliti and Megalopoli power stations will produce payroll savings of more than 21.2 million euros for the corporation, energypress sources closely following the power utility’s bailout-required disinvestment of lignite units, which includes the aforementioned facilities, have informed.

A total of 360 employees working at the two lignite-fired power stations have accepted PPC’s voluntary exit proposal, offering 25,000 euros in severance pay.

A total of 243 PPC employees at the Megalopoli unit have registered for the voluntary exit plan. Their total payroll cost for the corporation has been estimated at 14.5 million euros. In addition, 76 Megalopoli unit employees departed in the previous six-month period for severance pay amounts of 15,000 euros. Their payroll cost reduction is estimated at 4.5 million euros, which brings the tally of the payroll cost reduction for all 319 employees to nearly 19 million euros.

As for the Meliti unit, a total of 41 employees have agreed to leave, producing payroll savings of 2.2 million euros.

Prospective buyers have indicated they want the workforce at Megalopoli and Meliti, totaling 1,248 prior to the voluntary exit plan, to be cut down to 600.

PPC yesterday announced a voluntary transfer plan for Meliti and Megalopoli unit employees, offering jobs at other power utility posts, sources informed.

The response of employees to this transfer offer is expected to be subdued as workers will take into account the distance factor. Most available posts are believed to be situated in the Athens area, not close to the Florina and Arcadia locations of the two units.

On another front, PPC and the owners of the Ahlada lignite mine feeding the Meliti power station are engaged in talks to resolve issues concerning their supply agreement, whose  whose pricing and quantity details are vague. The supply agreement will be taken on by Meliti’s prospective new owner.

 

 

 

Meliti, Megalopoli worker exodus at 360, Brussels grants extension

Main power utility PPC staff employed at the corporation’s Meliti and Megalopoli power stations, both loss-incurring, appear to be embracing a voluntary exit plan offered by the company as part of an effort to entice investors to its bailout-required disinvestment of lignite units. Outgoing workers presumably fear the job insecurity that lies ahead at the utility, now undergoing transformation.

A total of 360 workers at the Meliti and Megalopoli lignite-fired power stations have so far registered for the voluntary exit plan, offering severance pay of up to 25,000 euros, including bonuses, energypress sources informed. Officials believe the exodus tally could rise further.

Investors have indicated they want the workforce at Megalopoli and Meliti, totaling 1,248, to be cut down to 600. However, even such a reduction cannot guarantee sufficient investor interest as possible buyers want more incentives that would  compensate for these loss-incurring units.

At present, 1,017 workers are employed at the Megalopoli unit and 231 at Meliti. Investors want 480 workers to remain at Megalopoli and 120 at Meliti.

According to energy ministry officials, the European Commission has officially granted Greece a deadline extension for the voluntary exit plan that resets the date for February 8 from January 31.

If all goes according to plan, binding offers by prospective buyers will be expected on January 23, while improved offers, if needed, and a PPC announcement of the winning bidder will be due by January 31. Greece, according to the current schedule, needs to officially update the European Commission of the disinvestment’s conclusion by February 8.

Investors not warming to PPC lignite units sale, deadline near

Prospective buyers are maintaining an unfavorable outlook of the main power utility PPC’s bailout-required sale of lignite units with just over a week remaining before the latest deadline for binding bids expires.

PPC and the energy ministry will need to make further improvements to the disinvestment’s sale and purchase agreement (SPA) terms, sources stressed.

SPA revisions made in the lead-up to the sale’s deadline, now expiring on January 23, including a commitment for CAT remuneration of 40,000 euros per MW or up to 30 percent of the sale price, as well as a voluntary exit plan for workers at the loss-incurring Meliti and Megalopoli power stations included in the sale do not appear sufficient to generate genuine buyer interest.

Uncertainty continues to surround the outcome of state-controlled PPC’s voluntary exit plan as the date for binding bids draws nearer. Investors believe the workforce at the Meliti and Megalopoli power stations, currently totaling 1,248, needs to be cut down to 600. However, little time remains for an exodus of such magnitude.

Also, an existing agreement concerning lignite supply from the Ahlada mine to the Meliti facility has not been embraced by investors as its price and quantity terms appear vague.

In addition, a profit-and-loss sharing arrangement proposed by PPC for the units has not been been included in the SPA.

PPC unit candidates demanding major changes to SPA terms

Possible buyers of lignite units offered by the main power utility PPC in a bailout-required disinvestment have warned that incentives offered so far do not suffice to prevent losses incurred by two power stations, Meliti and Megalopoli, included in the sale, and, as a result, are demanding major changes to the sales and purchase agreement (SPA) terms.

The sale procedure’s binding bids deadline has been given a further extension until January 23, but, despite the additional preparation time, investors are warning structural problems at the units will make it difficult for them to participate in the sale.

Certain pundits suggest the negative talk could be part of a bargaining game played by investors aiming for the best possible terms and deals.

The need for a workforce reduction at the two power stations, down to a total of 600 from the current 1,248, is one of the main demands of investors, who believe half the current workforce would be enough to keep these units running.

PPC has offered employees a voluntary exit plan offering 15,000 euros in severance pay plus a 5,000-euro bonus. However, buyers want the ongoing procedure completed before they submit any binding bids.

Prospective buyers have determined the Meliti and Megalopoli are incurring losses of between 60 and 70 million euros per year. A subsequent profit-and-loss sharing scheme offered by PPC as remedy was included in the SPA terms but ended up not being accepted by Brussels, the energy ministry has informed.

 

 

Ambiguities prompt deadline extension for PPC units sale

Prospective buyers of lignite units offered by the main power utility PPC in a bailout-required disinvestment have been given additional time to submit binding bids, from January 7 to 15, as a result of various ongoing ambiguities troubling investors.

However, this eight-day deadline extension, granted unofficially without a proper Brussels approval procedure, may need to be stretched further if clarity is not secured for investors – especially the outcome of a voluntary exit plan for 1,248 employees at state-controlled PPC’s two lignite-fired power stations, Meliti and Megalopoli. All developments indicate the sale procedure will not go ahead unless this plan is completed.

Applying pressure, Finance Minister Euclid Tsakalotos wants pending national commitments, including the sale of PPC units, to be completed ahead of a second post-bailout review commencing on January 21.

Most investors eyeing the PPC sale have raised labor-cost concerns for both the Meliti and Megalopoli power stations, noting their aggregate workforce number should be reduced to 600.

The CAT remuneration level for these units, still unclear, is also spooking  investors.

Just after Christmas, on December 27, Energypress had reported that a deadline extension was inevitable, despite energy ministry claims of adherence to the procedure’s schedule, according to which, follow-up improved bids, if needed, would have been submitted on January 10. Given this schedule, the appraisal date for offers had been set for January 11 while Brussels was to be updated on January 15.

 

PPC’s voluntary exit plan terms still not ready, lignite units sale deadline near

The eligibility terms and conditions for the main power utilty PPC’s voluntary exit plan concerning 1,248 employees at two power stations included in a bailout-required sale of lignite units have yet to be prepared despite being a crucial factor in the disinvestment effort’s outcome.

PPC has announced that employees interested in taking up the voluntary exit offer need to submit applications by January 10 but has yet to offer eligibility details.

This delay is injecting credibility into rumors of a deadline extension for binding bids by prospective buyers of PPC’s lignite units. They face a January 7 deadline.

Prospective buyers want to know the outcome of the voluntary exit plan before they submit binding bids.

Despite the time squeeze, energy ministry officials insist the  disinvestment’s schedule will remain as announced. If so, binding bids will need to be submitted on January 7, improved offers, if required, must be submitted on January 10, and evaluations of offers will be made a day later.

Investors have not been given any other schedule dates for the sale, iit is believed.

A total of 1,017 staff members are employed at PPC’s lignite-fired Megalopoli power station and 231 at Meliti, the two facilities for which the voluntary exit plan applies.

Investors want the combined workforce total of 1,248 at the two units reduced to 600 workers, meaning 120 could remain at Meliti and 480 at Megalopoli. Union groups believe such a drastic staff cut will be difficult to achieve.

The voluntary exit plan, which also applies for employees who have yet to gain pension rights, offers 15,000 euros in severance pay plus a 5,000 euro bonus for every outgoing staff member.

 

 

Voluntary exit offer a final pitch in PPC lignite units sale effort

The main power utilty PPC has included a voluntary exit plan for 1,248 employees stationed at the loss-incurring Megalopoli and Meliti power stations into the sales and purchase agreement (SPA) terms of its bailout-required sale of lignite units in what appears to be a final pitch to convince hesitant investors.

The labor flexibility term is one of four key incentives included in the SPA by the power utility, appearing eager for a successful sale procedure, representing 40 percent of its overall lignite capacity, to avoid repercussions, notably the addition of hydropower units to its bailout-required sale list.

In comments yesterday, PPC’s chief executive Manolis Panagiotakis argued the losses being incurred at the utility’s Megalopoli and Meliti power stations are less than figures being reported. He contended quarterly losses are 4.5 million euros at the Meliti unit and 3 million euros at Megalopoli.

Employees accepting the voluntary exit plan stand to receive severance pay of 15,000 euros and a bonus amount worth 5,000 euros.

A total of 1,017 staff members are employed at the Megalopoli facilities and 231 at Meliti. In the case of Megalopoli, employing a far greater number of persons, the voluntary exit plan will also be available to workers who have yet to accumulate retirement rights.

Investors have called for a reduction of workers at both units to 600 employees in total, which could be difficult to reach as 648 employees would need to accept the voluntary exit offer.

Other key incentives offered to investors in the SPA include Brussels-endorsed CAT remuneration of between 35,000 and 40,000 euros per MW for lignite-fired power production over a six-year period; a steady lignite supply price by PPC for the Meliti power station until a dispute concerning the nearby lignite mines in Florina is resolved; and the eradication of a lignite surcharge, already ratified in parliament and factored into investor equations.

Binding bids by potential buyers are due on January 7.

Buyers presented PPC sale’s make-or-break SPA terms

Prospective buyers of main power utility PPC lignite units on offer through a bailout-required disinvestment will be presented a finalized sale and purchase agreement’s (SPA) terms today, seen as a make-or-break step in this sale procedure.

The appraisal by investors of the SPA, featuring four new bonuses as incentives, will determine their level of interest in the sale of power stations and mines representing 40 percent of PPC’s overall lignite capacity, as well as the level of  binding bids they will be prepared to submit on January 7. Officials plan to complete the procedure on January 15.

The SPA includes the elimination of a lignite surcharge, already implemented and factored into calculations by investors.

It also includes a new term, submitted to parliament yesterday as part of a wider package of energy sector adjustments, enabling new owners to reduce personnel at units acquired. Any staff members not needed at these units will be transferred to DEDDIE/HEDNO, the Hellenic Electricity Distribution Network Operator, according to the SPA. All prospective buyers had demanded this labor flexibility term. It is estimated between 300 and 400 employees, the majority from the Megalopoli power station, could end up being transferred.

A third bonus in the SPA entails CAT remuneration eligibility for PPC’s lignite-fired power stations up for sale for a period of at least six years, until 2025, as was announced yesterday by the European Commission.

The fourth incentive ensures investors a steady lignite supply price by PPC for the package’s Meliti power station until a dispute concerning the nearby lignite mines in Florina is resolved.

The energy ministry and PPC believe these four bonus terms will offset operating losses believed to be incurred by the power stations for sale, as was determined by investors.

All possible buyers have continued to remain cagey on their intentions, despite the announcement of the sale’s bonus terms.

 

Energy ministry, DG Comp discussing new incentives for PPC units sale

Energy ministry officials and the European Commission’s Directorate-General for Competition are negotiating a new incentive plan for investors considering the main power utility PPC’s sale of its Meliti and Megalopoli power stations, part of a bailout-required disinvestment of lignite units, energypress sources have informed.

The two sides are distancing themselves from a previous Greek proposal offering prospective buyers a profit-and-loss sharing arrangement for the units and focusing on a new incentive model, the sources added.

The Meliti and Megalopoli power stations are loss-incurring, possible buyers have determined through due diligence.

Officials closely monitoring the negotiations informed the new model’s objective is to restrict expenses and increase revenues.

It is believed negotiations could conclude tomorrow, if all goes well, otherwise talks will continue into next week.

PPC is scheduled to stage a board meeting on December 20 to endorse the corporate group’s nine-month results and the sale and purchase agreement (SPA) terms, including incentives.

Binding offers by investors for the Meliti and Megalopoli units are scheduled to be submitted on January 7. If improved bids are requested, these will need to be submitted on January 10. Offers are planned to be appraised by PPC’s board a day later and, on January 15, the energy ministry will inform the European Commission’s Directorate-General for Competition on the disinvestment procedure’s results.

This is the official schedule. It remains to be seen if the plan will be adhered to. All will depend on whether investors will embrace the incentives now being discussed.

 

 

Focus on Amynteo upgrade, Meliti II sidelined, for CATs

The energy ministry plans to focus on an environmental upgrade plan of the main power utility PPC’s Amynteo lignite-fired power station in the country’s north, intended to keep the facility running until all lignite deposits in the region have been depleted and, at the same time, sideline the development prospects of Meliti II – also in the north, in the Florina area – as a lower-priority project, as part of a wider effort to ensure CAT remuneration for existing lignite units.

The main power utility PPC, facing a bailout-required disinvestment, is currently selling lignite units and mines representing 40 percent of its overall lignite capacity.

A study conducted by PPC, as part of partnership talks with Chinese investors, has shown that Meliti II can only be a viable project with CAT remuneration support.

Under the EU’s current decarbonization regulations, an addition of Meliti II to the national grid will only be possible if the country’s other lignite-fired units are environmentally upgraded to an extent that would enable a Meliti II entry without any negative impact on the country’s greenhouse gas emission reduction targets.

Any new owner of Meliti II will need to factor in the investment cost of these strict decarbonization regulations.

Meliti unit production costs can be reduced to a profitable level

Elevated production costs at the Meliti power station, included in the main power utility PPC’s bailout-required sale of lignite units, have been attributed to a fragmentation of related mines and the power utility’s need to resort to solutions such as combined xylite and lignite imports from the Former Yugoslav Republic of Macedonia (Fyrom) in order to secure needed fuel for the unit. These high production costs can be reduced, sources stressed.

Sources well informed on the matter noted that the sale plan for the Meliti power station includes the mines at Klidi, Meliti and Vevi, both PPC’s stake and the remainder owned by the Greek State, which will enable for a significant fuel cost reduction, allow for mine synergies, and, ultimately, make the power station more competitive.

Current fuel costs of between 45 and 60 euros per MWh could be reduced considerably, even more than halved, if existing problems at the Klidi mine are resolved to enable its return to action and, in addition, the Vevi mines owned by PPC and the Greek State are merged.

Furthermore, payroll cost reductions could reduce the power station’s overall production cost by 2 to 3 euros per MWh. At present, the payroll cost at the Meliti power station reaches 9.5 euros per MWh.

Other costs at the Meliti facility include maintenance and materials (7 euros per MWh) and depreciation (17 euros per MWh).

It is estimated that the Meliti power plant’s production cost could drop to less than 40 euros per MWh following investments and the merger of mines, which would make the unit competitive in the wholesale market.

The Meliti power plant’s current annual costs total approximately 95 million euros but could be reduced to a level of between 60 and 65 million euros per year and make the unit profitable following its privatization, officials believe.

 

Bigger interests in Megalopoli spark stronger PPC unit sale resistance

The turnout at a rally in Megalopoli, Peloponnese yesterday, held to protest against the planned sale of main power utility PPC’s Megalopoli III and IV units, exceeded the expectations of its union organizers with over 2,000 persons attending to signal the sale will not proceed without resistance.

The situation was far milder at a rally in northern city Florina, organized by Genop, PPC’s main union, which drew an estimated 500 protesters to rally against the inclusion of PPC’s Meliti unit, located in the area, to the sale package.

The reaction was stronger in Megalopoli as the employment stakes are far higher in this Peloponnesian city. The two Megalopoli units to be placed for sale employ some 1,100 persons, mostly locals, whereas the Meliti unit in the Florina area provides work for about 60 locals of 200 employed at the unit in total.

Also at stake for the people of Megalopoli is the potential loss of a sizeable carbon-related support sum distributed by PPC to the local community to help the development of various regional projects. This sum is believed to be worth 7 million euros annually. The handling by any private-sector investor of this vital financial injection for the Megalopoli community remains completely unknown.

At a political level, some unrest that has become apparent within the ranks of the Syriza party, the coalition’s key partner, appears to be superficial. Certain party MPs and affiliates have described PPC’s bailout-required disinvestment as a sell-out but are admitting they will ultimately abide by the party line.

 

PPC adamant on Meliti II plan with CMEC despite obstacles

The main power utility PPC appears adamant on its plan to develop a new lignite-fired power station, Meliti II, despite various unfavorable conditions, including objections raised by the government.

PPC, which has signed a Memorandum of Cooperation with CMEC, the China Machinery Engineering Corporation, for this project, recently made reference to its need in a public consultation procedure staged by RAE, the Regulatory Authority for Energy, for a 10-year development plan concerning the national electricity transmission system.

The Meliti II reference was made in a power utility contribution to the public consultation procedure, dated June 7, several weeks after various government officials had raised objections to PPC’s Meliti II plan, envisaged with CMEC as a partner.

PPC boss Manolis Panagiotakis recently noted that the inclusion of the existing  PPC Meliti I lignite-fired power station and the prospective Meliti II facility to the utility’s bailout-required list of unit sales would require any contract for the latter’s development to be offered through a tender.

PPC and the energy ministry have each hired separate consultants to prepare bailout-required sale lists containing 40 percent of the utility’s lignite capacity.

A recent landslide that led to the closure of PPC’s two Amynteo lignite-fired power stations has further complicated matters by bringing Meliti II into the picture for possible inclusion on the bailout-required sale list.

 

 

 

 

Meliti II inclusion on PPC sale list ‘would affect CMEC plan’

The inclusion of the existing main power utility PPC Meliti I lignite-fired power station and the prospective Meliti II facility to the utility’s bailout-required list of unit sales would require any contract for the latter’s development to be offered through a tender, the corporation’s chief executive Manolis Panagiotakis clarified today during a general shareholders’ meeting.

If the Meliti units are not included on PPC’s bailout-related unit sale list then PPC should not have any issues actualizing its plan, the utility chief pointed out.

Just days ago, deputy development minister Stergios Pitsiorlas noted that collaborations such as a partnership envisaged by PPC with CMEC, the China Machinery Engineering Corporation, for the construction and operation of Meliti II would need to be established through tenders. This was widely viewed as a further government obstacle to PPC’s plans.

“Much will depend on the procedure determining the units to be included in PPC’s sale package,” the PPC chief noted during today’s general shareholders’ meeting. The list of PPC lignite-fired unit sales needs to be prepared by next month.

“Preparing this list is not a simple matter as power stations cannot be split into units, nor is it easy to break up the mines supplying these power stations,” Panagiotakis remarked.

Prior to Pitsiorlas’s remarks, energy minister Giorgos Stathakis announced that a new tender would need to be staged for part of the Vevi mine, whose output would be crucial for Meliti II.

“If the Vevi mine’s current tender runs into trouble then this is sure to create problems with the Chinese investors for the Meliti project,” the PPC head noted. “This would also affect supply for PPC’s existing Meliti I power station,” he added.

 

 

PPC chief discusses new smart meter facility at CMEC meeting

The main power utility PPC’s chief executive Manolis Panagiotakis, accompanying Greek Prime Minister Alexis on a trip to China for the country’s Belt and Road Forum for International Cooperation, a premier diplomatic event, has held a series of meetings with key Chinese energy-sector figures.

Panagiotakis’s meetings, according to a PPC statement, included a session with CMEC (China Machinery Engineering Corporation) president Zhang Chun as well as other highly-ranked officials of the Chinese company.

CMEC has been exploring the possibility of collaborating with PPC for the development and operation of Meliti II, a prospective carbon-fired power station in northern Greece. Other senior PPC officials joined the utility chief for the CMEC meeting, dominated by talks concerning the Meliti II project. The meeting was described as a constructive session.

The two sides also discussed the prospect of jointly developing a smart meter production facility in Greece, which would serve both the local and foreign markets. This facility would create as many as 400 jobs, according to the Greek power utility.

PPC and CMEC signed a Memorandum of Understanding (MOU) last September for the Meliti II project.

Vevi mine essential fuel for prospective Meliti II station

Development of Meliti II, a second carbon-fired power station for the main power utility PPC in the Meliti area, close to Florina in the country’s north, would not be possible without guaranteed supply from the nearby Vevi coal mine, as the power station would be deprived of fuel, both market and PPC officials have pointed out.

Just days ago, the Meliti II project’s prospects were shaken by remarks from energy minister Giorgos Stathakis, who declared that a new tender will need to be staged for the nearby Vevi coal mine license as, according to the minister, a previous competition did not comply with regulations. This license concerns one part of the Vevi mine. PPC currently controls the rest.

Presumably, CMEC (China Machinery Engineering Corporation), currently examining the prospect of developing the Meliti II unit, would not get involved if coal supply from the Vevi mine is not assured.

Responding to the minister’s intention, PPC officials were quick to note that besides the Ahlada coal mine, supplying the utility’s existing Meliti I power station, no other approppriate source of coal exists in the area at present.

PPC holds the rights to three coal mines in the region until 2023. The first of these, Klidi, faces serious issues as a result of landslides. The situation cannot be rectified, according to many.

As for the Vevi mine, two options are available. The mine could be co-exploited by PPC along with the privately-owned section. However, the section to which PPC holds mining rights would need to be worked on as a second stage. Another option would be for PPC to begin mining from the hill’s other side. But this would require the Vevi village to relocate. Such a process would require at least five years, not including any legal complications that can be expected to arise. Past cases, elsewhere, suggest that around a decade would be needed.

Lofi, the third coal mine in the region to which PPC holds mining rights, is a doubtful prospect. Questions linger over the quality and quantity of the coal deposit here.

On the contrary, the Vevi mine contains high-quality coal, scientific tests have shown. The coal quality is good enough to serve any thermal station in the country, experts believe.

It remains to be seen what steps the energy ministry will now take for the Vevi mine section to be licensed out to the private sector. An agreement signed in 2014 between the energy ministry of the time and the Aktor company never made it to Greek Parliament for ratification as a result of snap elections that led to political change and an election victory for Syriza, now heading the coalition.

The Bobolas group, which owns a 25 percent stake of Aktor parent company Ellaktor, a Greek construction giant, has repeatedly sought to complete the pending Parliamentary approval for the Vevi mine agreement.

PPC boss insists Vevi mine will not affect Meliti II project

A government plan entailing the development of Meliti II, a second coal-fired power station for the main power utility PPC in the Meliti area, close to Florina in the country’s north, will go ahead, the utility’s chief executive Manolis Panagiotakis has reassured in comments offered to energypress.

The project’s prospects were shaken following remarks made yesterday by energy minister Giorgos Stathakis, who declared that a new tender will need to be staged for the nearby Vevi coal mine license as, according to the minister, a previous competition did not comply with regulations.

Presumably, CMEC (China Machinery Engineering Corporation), currently examining the prospect of developing the Meliti II unit, would not get involved if coal supply from the Vevi mine is not assured.

The state-controlled PPC boss noted that he recognized the need for a new Vevi tender, while expressing confidence that this development would not affect the government’s decision to collaborate with CMEC for the development of Meliti II.

 

Plan for new Vevi mine tender jeopardizes Meliti II project

Energy minister Giorgos Stathakis has disclosed an intention to not have endorsed in Greek Parliament an agreement reached in 2014 by a previous administration’s ministry and Aktor granting the latter exploitation rights of a coal deposit in Vevi, northern Greece, but, instead, launch a new international tender from scratch.

This development greatly threatens the possibility of CMEC (China Machinery Engineering Corporation) taking on a project to develop Meliti II, a second coal-fired power station for the main power utility PPC in the Meliti area, close to Florina in the country’s north. The Chinese firm’s involvement in the Meliti II project is seen to be highly unlikely if coal supply is not ensured.

“The energy ministry reminds that the segment of the Vevi coal mine offered through non-transparent procedures to private investors without an international tender will be reoffered through a legal procedure,” the energy ministry noted in a statement released today.

An agreement signed in 2014 between the energy ministry of the time and Aktor never made it to Greek Parliament for ratification as a result of snap elections that led to political change. The Syriza party was brought to power as the key partner of the country’s coalition.

The Bobolas group, which owns a 25 percent stake of Aktor parent company Ellaktor, a Greek construction giant, has repeatedly pushed for the finalization of the Vevi mine agreement’s pending Parliamentary approval.

PPC-CMEC deal resurfaces pending Vevi mine rights issue

Yesterday’s Memorandum of Understanding signed by main power utility PPC and China’s CMEC (China Machinery Engineering Corporation) for joint development of a second lignite-fired power station in Meliti, close to Florina, northern Greece, could serve as the vehicle to provide leading Greek corporation Aktor the rights to exploit the region’s major Vevi coal mine. The licensing procedure was bogged down by the country’s political transition that brought the Syriza party into power early in 2015.

Aktor, belonging to construction and media magnate George Bobolas, was the highest bidder in a tender for the Vevi mine’s rights. Aktor’s portfolio includes mining, quarrying, construction and photovoltaics.

“We will hold a discussion with the Prime Minister [Alexis Tsipras] during our meeting tomorrow [today] so that the Vevi matter may be cleared up,” PPC president Manolis Panagiotakis told journalists following yesterday’s MOU signing ceremony as Aktor’s deputy Dimitris Koutras listened on.

Aktor, along with the GEK Terna Group, whose CEO Giorgos Peristeris also attended yesterday’s signing ceremony, will join the PPC-CMEC Meliti power station venture the PPC chief noted yesterday.

Access to the major mine in Vevi, estimated to hold 60 percent of the area’s total lignite deposit, is essential to the PPC-CMEC partnership’s prospective power station, which would be fed by this deposit. The Greek-Chinese plan entails including the mine as an asset in the consortium to be established for the project.

The plan for Meliti II entails development of a 450-MW power station at a cost of 750 million euros. Necessary work needed at the regional mines to feed the facility will raise the cost to one billion euros. PPC is believed to be open to the prospect of becoming a junior partner in this venture.

According to energypress sources, Bobolas, Aktor’s chief, has repeatedly called for the Vevi mine deal’s finalization, requiring parliamentary approval. The MOU signed with CMEC is expected to provide the impetus required.

As the winning bidder for the Vevi mine’s rights, Aktor had signed an agreement with the previous administration’s environment and energy ministry in 2014, but it was not endorsed in parliament as a result of the ensuing elections.