Troika disputes sell-off target

Greece’s creditors cast doubt on Wednesday on the country’s target for privatization revenues next year during a meeting between the troika and the Hellenic Republic Asset Development Fund (TAIPED). The agenda of the heavily charged meeting was dominated by the constant delays in the sell-off program, along with how this problem can be corrected.

TAIPED officials spoke of a discussion on technical issues, but the inspectors from the European Commission, European Central Bank and the International Monetary Fund – known as the troika – remain unhappy with the delays noted to date and the new delays they can see coming.

In July the two sides agreed that a series of sell-off projects (Public Power Corporation, the Hellenic Post, the Piraeus and Thessaloniki port authorities and others) would start in the third quarter of the year, but this has not been the case. Worse, it has become clear that they will not be starting any time soon either, thereby putting in doubt the target for revenues of 2.5 billion euros in 2014, which was set in December 2012.

The only commitment TAIPED has made to the troika is that it will have started the procedure for the privatization of all state assets at its disposal, excluding real estate, by the end of next year. Consequently, all tenders for the sale of government holdings in corporations should have started by December 2014, although TAIPED refuses to commit itself regarding the exact date each process will be completed. Normally, each process takes around two years to complete.

It does appear, however, that the politically sensitive privatizations of Hellenic Defense Systems (EAS) and the Hellenic Vehicle Industry (ELVO) have been taken out of TAIPED’s hands and returned to the Finance Ministry. Market sources are not ruling out the repetition of this pattern for other projects in which TAIPED has identified a major risk in the sell-off process or believes there will not be any satisfactory revenues. This is already the case for major highways, with the exception of Egnatia Odos.

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