ECONOMY

PPC sailing into rough financial waters

The alarm bells are ringing loudly over the state of Public Power Corporation?s finances as its continues to stumble under the weight of unpaid bills, the high price of energy and its inability to repay loans reaching 5 billion euros.

Sources also warn that the country?s biggest electric power company may soon face difficulties in meeting salary payments to its employees despite the 40 percent reduction in its wage bill, a result of new government austerity measures. For the time being, the company is delaying its payments to contractors and suppliers, while significant cutbacks have also been made to its investments.

According to official figures, the number of unpaid bills has skyrocketed over the past two months. Total debts to the company from unpaid electricity bills had reached 820 million euros by the end of February, with 250 million euros of that amount being marked as unlikely to be paid.

Moreover, PPC?s financial woes are expected to be compounded by the end of March, when the deadline expires for a debt installment of 700 million euros, as the firm?s management has been able to procure loans of just half of that amount so far, and that at a high rate of interest.

The number of unpaid bills has shot up in the last two months, according to company sources, raising concern about where the numbers will go next, especially given people?s inability to pay their bills when they are burdened by the emergency property tax.

Of the total 820 million euros owed to PPC, around 400 million is by households and small businesses, while large companies Aluminium of Greece and Larco, a nickel producer, owe 100 million and 95 million euros respectively. Another 180 million is accounted for by bills that have not been paid by the public sector. These debts, meanwhile, do not include the 67 million euros PPC is owed by now-defunct private electricity suppliers Energa and Hellas Power for use of its network.

The management at PPC was also dealt a heavy blow by the Council of State, the country?s highest administrative court, which ruled that it would have to pay Energa and Hellas Power damages of 80 million euros.

PPC?s coffers are also expected to take a hit from the daily increases in the price of energy purchases as the average price is continuing to inch up on the wholesale market.