The sell-offs that are key to plan’s success
This year appears to be the real starting point for the process of privatizing state companies, given that as many as 28 projects at least will begin within 2013 with the aim of most of them being completed by the end of 2014.
Up until late 2012 the results from sell-offs had been particularly poor, meaning that the state privatization fund (TAIPED) has had to pick up pace this year to make up for lost ground. Its planning provides for the completion by end-2014 of all sales of state corporations such as gaming company OPAP, Hellenic Post, Public Gas Corporation (DEPA), gas transmission network operator (DESFA) and the concession of infrastructures such as ports, airports, highways etc. These sales should bring in some 5 billion euros.
There is no doubt that the most important projects are those of OPAP, DEPA and DESFA. These sell-offs hold the key for meeting the target not only for this year’s privatization revenues, but probably for the entire sell-off plan. Expectations for the revenues from these privatizations are high as their successful completion would fetch 100 percent of the target of 2.5 billion euros set for this year and some 25 percent of the target set for the period up to 2016.
Again, if none of these privatization projects bear fruit, targets will likely not be met at least for 2013, triggering a clause in the agreement between Athens and its creditors for new austerity measures.
Another significant cluster of projects concerns the highways and the Elliniko development. These two projects aim not only in reducing the country’s debt but also in growth, as the bulk of the funds for them will be channelled to greenfield investment.
From 2015 onward privatizations are estimated to focus exclusively on the utilization of public property assets. TAIPED appears to be faring better in this domain, as up to now it has managed to collect revenues of 100 million euros, while much more money is expected to come in over the course of this year from the sale of property assets abroad and from the utilization of tourism units such as Astir Palace at Vouliagmeni, the Xenia chain of hotels and other important properties like the former royal estate at Tatoi, Prasonissi near Rhodes, etc. A total of 1,000 properties, with an estimated value of 6 to 7 billion euros will have to be transferred to TAIPED for this purpose.
Up until recently the utilization of public property assets had been seen as a lost cause, as title deeds were lost somewhere in state offices, there were no mechanisms for their utilization and the course of the market did not favor their utilization. However TAIPED has done fairly well so far, as besides the 100 million euros collected – which could soon rise to 140 million – another 40 million is expected to come in from the sale of six properties abroad.
Furthermore, the plots of Afandou on Rhodes and Paliouri in Attica, as well as the sale of Commercial Utilization Spaces could secure additional revenues within a short period of time.
Crucially, these property assets bring fresh money into the market and the Greek economy in general. The sale of the rights to the Cassiope property on Corfu brought 23 million euros to TAIPED, but the investor that took the plot over has also undertaken to invest another 75 million euros. The sale of the International Broadcasting Center in Athens will also fetch an additional investment of 20 million euros for the creation of the Olympic Museum, which for six years was at the stage of a proposal submitted to the Culture Ministry. Such investments can bring in more foreign investors that will restart the country’s economy and breathe new life into its tourism industry.
