The never-ending privatisation drama

If at first you don’t succeed, set your sights lower. That’s what Greece is doing by revising the fundraising targets it has set in selling state assets, including infrastructure. The initial target has, since 2011, been dropped to €19 billion then €15 billion and most recently to €11 billion, according to news reports.

These failed attempts have frustrated the International Monetary Fund, the European Union, and the European Central Bank – the lenders responsible for the €240 billion bailout Greece has received so far.

In 2011, the country, through its privatisation agency, the Hellenic Republic Asset Development Fund (HRADF), managed to meet its goal for that year after revising it from €5.5 billion to €1.8 billion; it completely missed its 2012 target of €3 billion.

As for 2013, the target was cut once again from €2.6 billion to €1.6 billion. Part of this year’s proceeds were to come from the sale of the natural gas monopoly DEPA, which failed to materialise after Russia’s Gazprom, the sole bidder for the asset, withdrew citing “significant risks,” according to the Wall Street Journal. Greece, however, did manage to unload natural gas grid operator DESFA to Azerbaijan’s state gas operator Socar for €400 million.

Another €842 million was raised in July and August with the sale of state lotteries and gaming monopoly OPAP.

However, most infrastructure assets that were listed for sale in the 2012 draft budget still belong to the Greek state. Among them are the Athens Water Supply and Sewerage Company (EYDAP) and the Thessaloniki Water Supply and Sewerage Company (EYATH). No sale is possible until the government pays what it owes the two utilities.

The government has promised to settle arrears by the end of September in a Letter of Intent it sent to the IMF on July 17. It also stated that “we continue to make progress in preparing assets for privatisation, although delays in sales have occurred”.

This was before the agency’s most recent chairman, Stelios Stavridis, was forced to resign in August after accepting a ride on the private jet of one of the OPAP buyers. Formerly chief executive of EYDAP, he had replaced another public utility chief just five months earlier. Takis Athanasopoulos, who joined HRADF as chairman in July 2012, stepped down in March after being charged for breach of duty while serving as head of the state power company DEH, also slated for privatisation.

The drama continues…