Job too tight for shipyard

On March 31, 2002, the Greek government signed an agreement to sell Hellenic Shipyards to a consortium between one of the world’s biggest groups, Howaldtswerke-Deutsche Werft (HDW), and trading house Ferrostaal of Germany, after more than 10 months of hard negotiations which came near collapse several times. But key terms of the agreement, which closed a tumultuous chapter in the shipyard’s history under public management, never came to light. The long negotiations had focused on six contracts for rolling stock that the facility had signed with Hellenic Railways (OSE) in 1997. The Germans’ main demand, which evidently was not met in the end, concerned the cost or writing off of compensation clauses for OSE, which today amount to 160 million euros. Implementation of the contracts was seriously delayed during the negotiations. Opaque terms No one ever learned how the specific issue was overcome; OSE raised objections to a possible revision of the contracts and ridding the new owners of any obligations arising thereby. According to reports that transpired then, the government provided HDW-Ferrostaal with verbal assurances of a suitable arrangement. But rather curiously, on the day the sale agreement was signed, the Defense Ministry also signed new contracts with the shipyard worth 1.2 billion euros, probably to soften HDW-Ferrostaal’s objections to the OSE clauses. The issue has resurfaced now, just one year away from the Olympic Games, as OSE is anxious to receive in time the ultra-modern rolling stock, totalling a capacity of 17,500 seats, which will be needed for the Athens suburban railway. OSE’s management, citing the danger of being held accountable for the money already paid in advance for the contract and being accused of neglecting public interest, is asking for the compensation clauses to be activated as the contract schedules do not look like they will be met. For its part, Hellenic Shipyards, as leader of the six constortiums that have undertaken to implement the contracts, has been pressing for months for a settlement of the issue. As the two sides, not surprisingly, have failed to reach a compromise solution, the matter has reached the prime minister, who is no stranger to the problems of the shipyard as he was minister of industry in 1995. He has instructed his ministers of economy, transport and development to find a solution that looks likely to also involve Piraeus Bank, now the owners of the Hellenic Industrial Development Bank (ETBA) which was part of the old managerial scheme for the shipyard and had acted as privatization advisors. The hitch has attracted the interest of the opposition which raised the issue in Parliament with a spate of statements and questions concerning not only the substance of the dispute but also casting doubt on the entire privatization of the shipyard. And as is common in cases of large and disputed interests, all available means are used, from the «acceptable» pressure that the interested sides can exert to promote their interests to the «unacceptable» exploitation of the anxiety of workers about their jobs. While management would provide assurances that no lay-offs were being considered, other sources «leaked» to the press that the Germans are using the workers as a pressure lever and are threatening to shrink operations, or even abandon the facility. Top-level meeting The issue was discussed at a top-level meeting including the three ministers on Thursday. Hellenic Shipyards is contractually obliged to deliver the largest part of the order by January 1 and the rest by August 1, 2004. According to OSE officials, the shipyard has already delivered seven carriages. The contracts, part of the so-called «programmatic agreements» designed to increase Greek added value and jobs in public enterprises (but since disallowed by European Union rules), forbid the transfer abroad of part or whole of the work involved in the project. The shipyard is unlikely to fulfill the contract; the main reason being the lack of adequate infrastructure which has exacerbated delays. According to sources, its proposal, put forward at last Thursday’s meeting and designed as a basis for revising the contracts, consists of three main points: First, that the shipyard be allowed to outsource as much work as possible; second, that part of the order be allowed to be met by foreign subcontractors abroad; third, that OSE accept substitute trains to meet the urgent needs of the suburban railway prior and during the Olympics and until the new ones are delivered. Hellenic Shipyards has calculated the cost of the above measures at about 60 million euros. It is asking that they be accompanied by a new schedule and absolution from the punitive clauses of 7.5 percent of the contract value, as well as what they will have to pay to the other members of the six consortiums. According to the shipyard’s management, OSE insists on payment of the compensation and accepts the substitution of trains which puts the total cost at an unacceptable 175 million euros. Development Minister Akis Tsochadzopoulos indicated that a compromise solution is in the works – for lack of any other.