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The drama of the Greek Public Power Corporation: “To privatize or not to privatize”

30 June 2010 / 13:06:50  GRReporter
4422 reads

Victoria Mindova

 

"We do not sell and we are not for sale" reads the slogan, which is stretched on a giant canvas of the building of the Greek Public Power Corporation on Halkokondilis Street in Athens. Another ultimatum typed in huge letters related to the prohibition for additional appointments in the company. Regardless of the fact that because of lack of staff, the company spends more than 100 million euros per year in overtime payments. Both requests are the initiative of the Confederation of electricity sector workers in Greece, who are threatening to organize long term strikes if the government of George Papandreou does not give up its plans to reform the state enterprises and to launch a series of privatizations (including the Public Power Corporation).

The liberalization of the domestic market, according to the principles of free trade is one of the priorities of the socialist government and it is expected to contribute at least 1% of the GDP in revenue to the state for the next year. The energy market in Greece on the other hand is currently a state monopoly which today is on the verge of bankruptcy. The beginning of the privatization started earlier this week, when the government launched a package of shares of the electricity supply company on the Athens Stock Exchange. Minister of Energy, Environment and climate changes made a promise that the state will retain a 51% of the shares. The argument for this restraint is that the Greek electricity company is still profitable and doesn’t make sense to privatize it.

This claim did not convince the union leaders in the government’s intentions and the President of the Confederation of electricity sector workers Nikos Fotopolous said yesterday from the stirkes platform on Pedio tu Areos: "The promises of some ministers do not soothe us. Once again we announce that the sale of the Public Power Corporation and the electricity distribution networks will not be allowed."

Meanwhile, Executive Director of the Public Power Corporation Arthouros Zarvos alarmed that from 2013 the company will have to buy the right to use lignite coal which in the combustion process emit large amounts of carbon dioxide in the atmosphere. The payments of these so-called "carbon taxes" are consistent with the objectives of the European Union countries for environmental protection and reduction of harmful emissions into the atmosphere by 2020. Thus in less than two years the currently profitable state electricity company will become losing, because at least 800 million euros a year will cost the repayment of the eco-friendly taxes.

"According to our estimations in 2012 we expect net profit of about 400-500 million euro. Since 2013, however, this will be the ammount of our annual loss. We have to either increase the price of electricity, or to declare bankruptcy", said before journalists the head of the Greek Public Power Corporation. There is also a third option which neither the managers nor the workers are currently not willing to discuss and it is the full privatization of the company either following the principle of privatization or through concession. The most important condition in both cases is the private owner / concessionaire to undertake with a contract the renovation of the electricity production, and to develop alternative energy sources. This will reduce the percentage share of electricity produced from lignite and respectively the end price for consumers, while at the same time the electricity market in the country will be better synchronized with the European objectives in this sector.

Last but not least remains the problem of shortage of staff in the Public Power Company The boycott of the labour unions against the additional appointments in the company seem to be more than controversial given the fact that they themselves are forced to work more man-hours than those accepted according to the leagal labour relations in the country. Specialists in the field explain that the reaction of trade unions is linked to the payment of additional amounts for overtime (overtime). When opening new job positions, these practices will be stopped. Thus, older employees in the company would be "harmed" and will have to rely only on their net salary.

Tags: National Electricity Company privatization economy markets companies
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