TAP pipeline on hold amid country’s political uncertainty

The country’s latest round of elections, scheduled for September 20, has placed on hold the TAP (Trans Adriatic Pipeline) project, one of the biggest investments being planned for Greece, both in terms of its potential for the economy and Greece’s geopolitical weight.

Despite the prospective project’s significance, the country’s recently replaced Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis – a radical leftist who has now adandoned Syriza and gone on to form his own anti-bailout and anti-eurozone membership Popular Unity party – had severely hampered progress, and even maintained a hostile stance, according to some officials.

His successor, Panos Skourletis, appointed in July for what proved to be a short-lived tenure, generated some hope that obstacles would be overvcome and renewed progress would be achieved, before early elections were eventually called just weeks ago by Prime Minister Alexis Tsipras in search of a fresh four-year mandate.

The delays to the project since Syriza’s rise to power following last January’s snap elections have added pressure to the project’s schedule, according to which work will need to commence within 2016. This boils down to meaning that licensing procedures for the Greek segment of the project, planned to carry mostly Azeri natural gas to central Europe via Greece and Albania, will need to be issued within the next few weeks and months. Otherwise, this major foreign investment, valued at 1.5 billion euros, may end up being placed in doubt.

Officials at the TAP consortium are now awaiting the results of the upcoming Greek elections, the country’s third showdown at the polls this year, including the referendum held on the bailout terms, before any further moves are made.

At last week’s energy ministry handover ceremony – where Ioannis Golias, a former Dean at the National Technical Univesity of Athens, was appointed energy minister for Greece’s interim government – Skourletis reiterated his predecessor’s call for increased benefits in exchange for the pipeline’s route through Greece. He noted that negotiations on this matter were at a crucial stage.

Without a doubt, Skourlelis was far more diplomatic than his outspoken predecessor, who, when replaced at the energy ministry, had candidly opposed the TAP project. Besides reiterating his demand for increased land-use compensation to farmers and local communities, as well as route revisions, Lafazanis had also called for increased tax rates on the TAP consortium. The milder Skourletis was far more subdued, at last week’s handover ceremony, expressing hope that the negtiations will lead to favorable results, while adding that Greece aspires to develop into an energy hub that may contribute to European energy security.