The state is in desperate need of funds from privatizations, but as all procedures in the state privatization fund (TAIPED) have been frozen for the last couple of months due to the two general elections, the targets for sell-off revenues this year will have to be revised again. Only the state lotteries are ready to be sold off, with the Public Gas Corporation (DEPA) a possible second target, under certain circumstances.
?Progress in the privatizations sector has been slower than expected,? was the admission by the European Commission in its recent report on the Greek economy in the context of the implementation of the stability and growth plan in the European Union.
Brussels attributes the sell-off delays to the adverse market conditions as well as the technical and legal obstacles raised during their preparation. ?In the months prior to the private sector involvement [PSI], the market showed particularly low interest in Greek assets,? the Commission document released at the end of May stated.
Brussels now expects the implementation of Greece?s second loan agreement to overcome the obstacles: ?Provided that the implementation of the second funding program helps lift the negative conditions in the markets, the privatization fund will be able to create a constant flow of assets for privatization for a number of years,? the Commission states in its recommendations to the Greek government.
The margin for the creation of revenues in 2012 is particularly small. Speaking to the Financial Times and on CNBC, the general director of TAIPED, Costas Mitropoulos, admitted that in the next few months revenues from privatizations will remain close to zero. All accept that the target of revenues of 3 billion euros from privatizations by the end of the year is not possible anymore, which is why the target set for sell-off receipts by 2015 will have to be reduced from the 19 billion euros set out in the bailout agreement.
As a result, the only privatization that could bring in significant revenues by the end of 2012 is that of the state lotteries, which is at the most advanced stage, with DEPA and the gas transmission network operator DESFA likely to follow.
The Commission insists on the target for privatization revenues remaining at 50 billion euros, but does not rule out an increase to the assets to go on sale after the recapitalization of local banks. Brussels notes that besides contributing to covering financing needs, privatizations ?continue to be of vital significance for the return to growth, the modernization of the economy and the attraction of foreign direct investment.?
Still, despite the freeze in the privatization process, the fund appears to allow certain procedures to continue as they do not require approval by the TAIPED board. Therefore the fund has just published a tender for the hiring of a legal counsel, with an emphasis on EU law, for the needs of the project regarding the utilization of the Elliniko plot.
The fund also published the environmental effects study for the International Broadcasting Center, according to which the additional structures, besides the Golden Hall shopping mall, could be used for the creation of a museum for the 2004 Olympic Games, for the lease of professional spaces (for offices, restaurants or entertainment etc) as well as for theaters etc.