The road to the privatization of the Public Gas Corporation (DEPA) appears to be full of obstacles, with particular problems emerging for the process that will start with the submission to Parliament of a bill to that effect.
The take-or-pay safety clause in the procurement contract with Russia’s Gazprom and the recent decision by an Athens court that deemed the pricing method for natural gas illegal are emerging as huge concerns that are hampering the company’s competitiveness and compromising the new plans to privatize it.
The court decision that reduces the debt of Hellenic Fertilizers and Chemicals (ELFE) to DEPA by 60 million euros could set a precedent for similar cases by other major clients of DEPA, which may demand a renegotiation of their contracts with the utility regarding the pricing formula. That would completely upset the gas company’s finances and deter possible investors.
The take-or-pay clauses included in the latest revised contract with Gazprom, from 2014, whereby DEPA either absorbs the agreed gas quantities or pays a fine, are an even greater threat to DEPA. This year DEPA will have to pay Gazprom 30 million euros, its market share is continuing to shrink and the contract doesn’t end until 2026, so the dues to the Russian company are likely to grow with every passing year.