Greece aims to sell gas firm, buildings in Q1

Greece, having so far raised less than 4 percent of targeted 50 billion euros in asset sales, aims to sell gas company DEPA and 35 state buildings by the first quarter of 2012, the head of its privatizations agency said on Monday.

Athens is committed to a timetable of asset sales to continue receiving bailout loans from its euro zone partners and the International Monetary Fund to pay down its debt mountain but it has fallen behind target on its divestment plan.

Imploding stock market prices amid a worsening economic climate in Europe are hindering its divestments agenda, forcing authorities to revise down initial targets.

Costas Mitropoulos, head of the Hellenic Republic Asset Development Fund said most projects of the three-month old agency he runs will culminate in public tenders despite adverse market conditions.

“There is a high disconnect between asset values and the prices we can obtain in the market, it depends a lot on international market conditions,» he told a meeting of Korean business people.

The asset development fund aims to put gas company DEPA on the market in the first three months of next year and launch a tender for a major urban redevelopment project at the site of Athens’s old airport at Hellenikon, Mitropoulos said.

“It is the largest urban redevelopment project in the world, hopefully we will have a winner by December next year,» Mitropoulos said.

He expects construction costs to exceed 5 billion euros to turn the abandoned airport site into a park and other facilities including residential, business and tourism developments.

Mitropoulos said other state divestment projects in the second half of 2012 will include concessions for 12 ports and 39 regional airports along with sales of stakes in the Athens and Thessaloniki water utilities.

Greece’s repeated failure to meet budget targets including for privatization revenues has angered international lenders, raising questions about whether they will continue indefinitely to keep the country afloat with bailout loans.

On Sunday, Mitropoulos told Kathimerini newspaper that the privatization revenue target of 9.3 billion euros ($12.3 billion) for 2012 was «achievable,» based on the draft budget assumptions but a lot would depend on market conditions.

“If this (difficult economic) situation continues, then it is certain that it will be difficult for us to find buyers for our assets,» he told the paper.

Greece had initially agreed with its international lenders to raise 5 billion euros from state asset sales this year. But delays in setting up the privatization fund and plunging stock market values on the Athens bourse forced the government to cut the target to 4 billion euros.

Greece is now seen raising only about 1.8 billion euros this year.

Under the terms of last year’s 110 billion euro bailout, Greece is meant to sell state assets worth 50 billion euros by 2015 to convince its lenders it is serious about reforming its uncompetitive economy and also to shoulder part of the cost.

“If we are going to win this battle — to set the economy back in motion — the contribution of the privatizations fund is very important,» Mitropoulos said. [Reuters]