BUSINESS

Second thoughts over setting up Public Holdings Company

VANGELIS MANDRAVELIS

The Hellenic Railways Organization (OSE) is among the loss-making companies that would burden the Public Holdings Company (EDIS) if it is set up after all.

TAGS: Privatizations, Finance

The operation of the new Public Holdings Company (EDIS), the subsidiary of state assets hyperfund EESYP which is supposed to directly control all state corporations until they are sold through the hyperfund, is far from certain, even though its creation was provided by law when EESYP was established.

Sources say that EDIS is yet to be set up for two reasons: Because it will entail a huge workload for the Hellenic Corporation of Assets and Participations (the full name of EESYP) before it even secures any revenues, and because there are second thoughts about its necessity.

The setting up of EDIS would entail the obligation of undertaking all state corporations on behalf of EESYP. That would automatically make the hyperfund the most loss-making enterprise of the Greek state as it would incorporate state corporations such as the Athens Urban Transport Corporation (OASA) and the Hellenic Railways Organization (OSE), which lose millions every year. Furthermore, its financial details would amount to hundreds of pages every quarter.

Therefore some questions have arisen, mostly related to optimum governance and resources saving. Without EDIS in the equation, there would be two levels of management for every state corporation through the hyperfund, meaning that state companies would be directly controlled by EESYP.

Such direct control would not be unprecedented, as it has already operated successfully in the case of TAIPED: The state privatizations fund administered all of its holdings in state corporations (OTE, Hellenic Petroleum, Public Gas Corporation, Athens International Airport etc) directly, and this is a model that leads to some resource saving given that it does away with one of the corporation management levels.

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