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30/08/2016

Greece to sell state-owned gas company, grid operator

Energy

Greece to sell state-owned gas company, grid operator

gas_pipeline.jpg

Greece wants binding bids for its state-owned natural gas company and gas grid operator by the end of September and hopes to complete their sale in late autumn as it revives its privatization drive, a government official told press agency Reuters on Monday (6 August).

Hoping to regain credibility with international lenders keeping Greece afloat, the new conservative-led government has made speeding up privatizations a priority but has admitted delays from repeat elections in May and June.

After a meeting between political leaders and the finance minister on privatizations, the official said the government's priorities also included the sale of betting firm OPAP, the old Athens airport and buildings in Athens and on the islands of Corfu and Rhodes.

"What we're aiming for through the privatizations, apart from generating revenues, is to change the role of the state in the economy," the official said on condition of anonymity.

He said Russian, Italian, U.S. and French companies had expressed an interest in the natural gas company DEPA and gas grid operator DESPA.

Athens initially targeted privatization proceeds of €50 billion by 2015 but cut the target to €19 billion  after a making slow start on the program.

Former privatizations chief Costas Mitropoulos, who stepped down last month after accusing the government of hindering his efforts to sell assets, estimated that Athens would not raise more than €300 million from privatizations in 2012. It had targeted €3 billion for this year.

More than 90 percent of the privatization program includes the lease and sale of concessions of state land and infrastructure, the government has said.

?Last year, bailed-out Greece moved to sell its historic ports, the Port of Piraeus and the Thessaloniki Port.

Athens also aims to sell its Olympic sites and airports. Earlier this month, Greece's finance ministry said it has sold four Airbus A340-300 jets once owned by the now defunct carrier Olympic Airways to Apollo Aviations Group for $US40.4 million.

'This sale is included in privatisation plans as part of the medium-term strategy for Greek finances' demanded by international creditors, the ministry said in a statement.

Background

Greece has made progress in finding budget cuts needed to continue its €130 billion bailout agreed last March with the European Union and the International Monetary Fund but aims to soften its impact on an economy going through its worst post-war recession.

By the end of this year Greek GDP is expected to have shrunk by about a fifth in five consecutive years of recession since 2008, hammered by tax hikes, spending cuts and wage reductions required by two EU/IMF bailouts. Unemployment climbed to a record 22.6% in the first quarter.

Athens blames a deeper-than-expected recession for falling behind on its targets and wants to be given more time to catch up. Lenders say slow reforms have not given the programme a chance to work.