ATHENS – Not always allowed under the former ruling Radical Left SYRIZA to turn off power to people who couldn't pay, Greece's state-run electric company is on the verge of going under, new Environment and Energy Ministry Kostas Hatzidakis warned.
He's with the new ruling New Democracy of Prime Minister Kyriakos Mitsotakis who ousted SYRIZA and then-Premier Alexis Tsipras in July 7 snap elections, inheriting a mess at the Public Power Corporation.
"The company may or may not make it," said Hatzidakis, reported the business newspaper Naftemporiki as he ripped what he described as "economic insanity" about an agreement between Tsipras and the European Commission.
That would cut the Athens Stock Exchange-listed PPC's consumer base from 90 to 50 percent without any financial set-offs, he said, as SYRIZA tried to cancel a previous New Democracy government plan for a smaller public utility, which the Leftists fiercely opposed, wanting to keep state control over an agency often used for patronage hires.
Speaking to a local radio station, Hatzidakis said SYRIZA also sold-off a 66-percent share of the Hellenic Gas Transmission System Operator (DESFA) and 49 percent of the Independent Power Transmission Operator (ADMIE.) They only remembered PPC in order to show their sensitivity," he added.
Two weeks before the elections, reports said PPC was nearing collapse and needed 300 million euros ($333.89 million) to avoid clauses kicking in that would call in loans that are due.
Under SYRIZA, the company and Energy Minister Giorgos Stathakis ignored recommendations from the McKinsey consulting company to streamline operations, said Kathimerini.
At a late June meeting, Chief Financial Officer Alexandra Konida informed PPC’s management about the negative financial results in the year’s first quarter, doubting whether obligations could be met to suppliers, contractors and market entities after August, the paper said.
Konida reportedly said unless the company’s finances improve that it would need at least 600 million euros ($667.77 million) in the second quarter to keep going, with no word on what would happen otherwise.
PPC in 2018 lost 903.8 million euros ($1.005.89 billion) and the situation got worse in the first quarter that showed losses of 254 million euros ($282.69 million) and negative earnings before interest, tax, depreciation and amortization (EBITDA) of 80 million euros ($89.04 million) the report added of the plight.