Galery

2

1

Victoria Mindova

Antonis Samras’ government has made privatisation its top priority. The privatisation plan of the supervisory Troika of the International Monetary Fund, the European Central Bank and the European Commission proposed in 2010 had been frozen for almost two years and now, the coalition government is planning to trigger it to achieve economic recovery. GRReporter contacted the Hellenic Republic Assets Development Fund, which was established to carry out the privatisation. The representative of the Fund Christos Konstas told us what has been done so far and what the greatest challenges of the Greek privatisation programme are.

Privatisation is at the centre of the programme of the new tripartite coalition government. What is your role in implementing the government programme?

The Hellenic Republic Assets Development Fund started operating in August 2011. Its purpose is for an independent specialised institution such as the Fund to carry out the privatisation in an efficient and transparent manner rather than for ministerial offices to run it. Our organisation contributed 1.8 billion euro to the state treasury from August to December last year. We extended the licences of operation of the state lottery OPAP and the games of chance and the terms of work permits.

Are these actions set out in the bailout agreement?

All planned activities of the Hellenic Republic Assets Development Fund are set out in the recovery programme under the bailout agreement. The state has a stake in the organisation but it is not burdening the budget and the salaries are not paid from the pockets of taxpayers. This is an independent company that coordinates the privatisation programme of Greece, as set out in the bailout agreement. The total volume of the privatisation programme of the Fund is 50 billion euro.

How long will it take to raise these funds and on what sites or companies do you rely the most?

Under the second bailout agreement, Greece is obliged to collect 19 billion euro from privatisations, concessions and exploitation of public property by December 2015. It should be noted that 55% of the programme covers the development of property and state-owned land. 35% is related to concession contracts or public-private partnerships to develop infrastructure projects such as ports, airports and roads and only about 10% of the programme is related to the sale of state-owned enterprises. Of course, this programme is not about sale in its ordinary sense. In the cases of property and development of infrastructure projects, we are talking about providing a long-term right of use.

What are the greatest challenges you have encountered so far?

Property exploitation is a significant part of our programme. These assets have not been developed so far and this sector has great potential. A classic example of the opportunities provided by the property market is the old airport in the suburb of Elliniko. It has not been used in the last 10-12 years and today, nine different companies are interested in its development. The old airport of the capital could become the largest project for urban regeneration in the world with construction investment of five to six billion euro. Such a project would change Athens, increase GDP by 0.3% each year for 10 years and create up to nine thousand new jobs. It would include the construction of new hotels, a marina, a golf course, shopping centres and other infrastructures.

We had no democratically elected government in the first six months of 2012. Moreover, there was much uncertainty around Greece due to the debt restructuring (PSI). The processes before signing the second bailout agreement raised uncertainty in investors too. All these factors have delayed us in implementing the privatisation programme but we managed to prepare six large privatisation projects. They are for the development of the old Athens airport, the state lottery OPAP as well as for the sale of the two gas companies DEPA and DESFA, for the sale of the property of IBC’s mall Golden Hall, the property Kassiopi in Corfu and Afandou on the island of Rhodes. These public properties are already on the market and the relevant auctions are about to take place and we have another nine projects that are in stages of preparation. They are related to the privatisation of public water management companies, Egnatia motorway, the metallurgical company LARKO, the public racecourse and others.

Is there expressed investor interest in the gas companies serving Athens and Thessaloniki?

So far, there are 17 companies interested in buying part of DEPA and DESFA and 14 of them have been approved for bidding. Now is the period when they have to submit the specific business plans. They should indicate what stake of the specific companies they are interested in and how they are planning to develop them.

I would like to emphasize that the privatisation plan of state-owned property is not intended to raise funds to reduce or repay the external debt of Greece as is often heard. The amount of revenue from privatisation is much less than the accumulated external debt and it is unrealistic to talk about reducing the accumulated debt through the sale of certain public assets.  What is important to understand is that the privatisation plan is an extensive reform programme. It aims to attract direct private investment in order to stimulate economic growth and increase te GDP.