ECONOMY

Greece?s plan for privatization

Receiving advance payments for concessions is one solution the government is exploring to raise 50 billion euros through privatizations in the coming years, to reach the target that has been set in association with the European Union and the International Monetary Fund.

The state could cash in early on revenues from charging tolls on highways, games of chance and Greece’s mineral wealth. Athens has used this idea before in order to reduce its public debt, and it is estimated it could raise around 25 billion euros this way.

The government’s plan would involve setting up companies to receive the future state revenues from various activities. These companies will then be sold to private parties at a certain discount, which will reflect the fact that investors will take a risk that the revenues calculated today, will not necessarily apply for each of the next 25 years.

The first such project will concern the commercial exploitation of highways. There are several highways currently under construction: The Elefsina-Pyrgos section of the national road, the Corinth-Sparta highway, Ionia Odos in western Greece and the section from Lamia to Egnatia Odos on the Athens-Thessaloniki national road.

Current estimates put state revenues from these highway sections at 10-12 billion euros. However, this money will start coming in gradually within the next 30 years (as long as the concession agreement lasts), with the state’s portion increasing year after year.

Also, Greece’s creditors will ask the government to commit to signing a concession contract with a private investor for Egnatia Odos in northern Greece, while sources say that the Attiki Odos contract could also be extended.

The same method as the one used for highways could be applied to revenues from lotteries and the mineral wealth from mining and quarrying activity. Although there is no clear picture of the revenues from those categories, they could amount to between 10 and 15 billion euros, or even more.

Athens is also going to cash in on ports and regional airports. The project includes grouping ports and marinas into holding companies, to be later utilized. A similar project will run for airports.