BUSINESS

Green light for Trainose sale

VANGELIS MANDRAVELIS

TAGS: Privatizations, Transport, Finance

The case of state subsidies to railway companies OSE and Trainose is closed, finally opening the way for the latter’s privatization next month after a long wait.

On Friday the European Commission announced it was shelving the investigation into state support to the Greek railway firms, while Italian Prime Minister Paolo Gentiloni revealed that the agreement for the sale of 100 percent of Trainose to Ferrovie dello Stato Italiane would be completed in early July in his presence as well as that of his Greek counterpart, Alexis Tsipras.

The Commission’s Directorate-General for Competition (DG Comp stated on Friday that the measures Greece took in the past to support the restructuring of its two railway companies are compatible with European Union regulations on state aid.

“The measures will help the two public rail companies become more efficient and provide better service to Greek passengers and business customers. This fits into the wider context of Greece’s efforts to restore its economy’s competitiveness and achieve significant growth. The aid will also facilitate the future privatization of the companies and the opening of the Greek railway sector to competition,” Competition Commissioner Margrethe Vestager said.

The DG Comp statement noted that Greece had extended aid amounting to 16 billion euros to OSE and its 2008 spin-off, Trainose: This included the write-off of debts worth 14.3 billion euros, and annual grants of 340 million euros to OSE, while Trainose had a debt cancellation, an equity increase and annual grants totaling nearly 1.08 billion euros.

The support measures were deemed compatible with EU rules taking into account the difficulties the Greek railway sector faces and the significance of the proper operation of railway services for the Greek people. “These measures,” read the DG Comp statement, “have the legitimate objective of avoiding a serious disturbance of the Greek economy, without unduly distorting competition in the single market.”

Still, sources say certain issues remain pending about the privatization of Trainose, but their solution is just a matter of time.

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