ECONOMY

Crucial day for decisions about lignite plant sale

The process of selling Public Power Corporation lignite plants – which the government has agreed to as part of its deal for a bailout by its international creditors – could face serious challenges on Thursday, as the Spartakos regional union of Public Power Corporation workers is holding an event in the northern city of Kozani, to which Energy Minister Giorgos Papaconstantinou, also a local deputy, has been invited, and unionist reactions could determine the pace of the whole procedure.

On the same day, the board of PPC?s main union, GENOP, will convene in Kozani to discuss the same issue, while PPC workers are threatening to take to the streets of Thessaloniki this weekend to protest against the government?s plan for unit sales on the occasion of Prime Minister George Papandreou?s visit to the Macedonian metropolis to officially open the Thessaloniki International Fair.

The breaking of the PPC monopoly in the use of lignite fuel will inevitably continue with the sale of plants. One year after the decision by the European Union for the sale of plants, this reality is now understood even by the most hardcore of PPC unionists.

The dilemma has now moved on from whether plants must be sold to which plants should be sold to private parties: Old ones with low performance, which would have a smaller impact on the competitiveness of PPC but no one may be interested in buying, or high-performance units that secure investment interest and high returns but weaken the long-term competitiveness of PPC.

When his predecessor, Tina Birbili, passed this significant procedure on to Papaconstantinou, he did not hesitate to take the responsibility of selling the plants upon himself, something which Birbili had tried to avoid. From his first statements on the issue of lignite plants, Papaconstantinou showed he believed that discussions with the European Commission would have been more difficult than they eventually proved to be.

The sale of certain plants along with power swaps and the concession of the Vevi lignite mine to private investors was the proposal Papaconstantinou presented to the Commission when he took charge at the ministry, being almost certain that it would be accepted even if the total output to be conceded to third parties failed to reach the Commission?s requirement of 1,500 megawatts. His certainty was also based on the further privatization of PPC.

Indeed, the Commission viewed the proposal in a positive light, but posed a key question: Which plants would PPC sell?

This question triggered a new round of negotiations that are still going on, with the Greek side recommending the sale of two old units with a combined capacity of 540 MW, while Brussels is urging the sale of high-performance units totaling at least 1,200 MW, which means four plants.

The minister suggested that the negotiations will be concluded by September 15, which will probably mean that the government will have to add to its proposal for the sale of plants (that has the green light from GENOP), even if it does not fully accept the Commission?s requirement. Unionist reactions on September 8 and over the weekend of September 10-11 will go a long way toward making up the minister?s mind about that.