Greece's Debt-Crushed Electric Utility Not Ready for Privatization

Αssociated press

(AP Photo/Thanassis Stavrakis, file)

ATHENS – Despite a surge in its value, Greece's Public Power Corporation electric utility can't find any buyers just yet and isn't ready to be partially privatized or get invetors, Environment and Energy Minister Kostis Hatzidakis said.

With the stock price tripling since late May – it wasn't explained why as even before being elected in July 7 snap polls, the new New Democracy government said it feared PPC would collapse under the weight of unpaid bills.

In an interview with the state-run Athens-Macedonia News Agency (ANA-MPA), Hatzidakis indicated that the government could seek to sell PPC divisions, but not the whole company.

“The company may have been (stabilized), but it still faces many challenges and a 'horizontal' privatization would not be attractive for would-be investors,” Hatzidakis said, adding that some 60,000 consumers account for half of the unpaid bills to the company.

In September, After warning that Greece’s state-run Public Power Corporation electronic company was on the verge of going lights out because of a mountain of debt and unpaid bills, another audit has shown first half results for 2019 have staved it off, Energy Minister Costis Hatzidakis said.

A similar audit by Ernst & Young for 2018, under the previous ruling Radical Left SYRIZA government, showed the company’s survival was at risk, as he had repeatedly said after New Democracy took office following its win in the July 7 snap elections.

Hatzidakis said a “very serious development was avoided, one with grave repercussions for the Greek economy,” a direct reference to PPC’s possible bankruptcy that could have affected Greek households and businesses dramatically.

The new audit showed that Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) fell in the first half of the year to 117.5 million euros ($129.26 million) from 182.9 million euros ($201.2 million) from the year before.

SYRIZA, in which critics said was a bid to recurry favor after former Premier Alexis Tsipras reneged on anti-austerity promises and unleashed an avalanche of tax hikes, had at times allowed those who couldn’t pay their electric bills not to have their power turned off.

It wasn’t explained how there could be such a dramatic turnaround in the first half of the year when SYRIZA was still in power and its policies were as well and with worry the worst isn’t over yet as the company is still struggling with big losses.

Hatzidakis said the government will bring measures to free PPC from what he said were stifling state regulations and as a move goes on to partially privatize the grid manager DEDDIE. All lignite power plants will be closed by 2028, the government had also said.