ECONOMY

Confusion over future of sell-off fund TAIPED

On Wednesday, just days after asking the top executives of sell-off fund TAIPED to quit their posts, Alternate Finance Minister Nadia Valavani surprisingly called on them to stay on until further notice and to postpone any significant decisions on privatizations for at least two to three weeks.

Over the course of a three-hour meeting with the fund’s board at TAIPED headquarters in Athens, Valavani discussed all issues pertaining to its responsibilities and also asked Chairman Emmanouil Kondylis and CEO Paschalis Bouchoris to remain in their positions in order to take care of the fund’s day-to-day affairs. She also met with TAIPED staff representatives and assured them that the government does not want anyone to lose their job.

A Financial Times report has noted that Bouchoris is determined to tender his resignation by the end of the week. The TAIPED CEO stated that during his meeting with Valavani she said the new government’s intention is “that the privatizations policy will not be continued.” However, TAIPED officials said this view was expressed before Wednesday’s meeting, so Bouchoris might stay on unless advised otherwise.

Valavani has not given any further signs of the government’s next moves regarding TAIPED and privatizations. Market professionals believe that the government has not yet made up its mind on the issue. As a result, the privatizations program has been effectively frozen, with decision-making, tender completion etc being subject to extensions and postponements.

Meanwhile, according to Reuters, the German government has demanded that Athens secure revenues of 2.2 billion euros from privatizations in 2015 in order for the bailout support program to continue. The 2.2-billion-euro target is particularly high considering the delays noted to date and the fact that TAIPED revenues since its establishment have stood at around 1 billion euros per annum on average.

It is also clear that this target cannot be attained without the concession of the 14 regional airports, and likely the major project at Elliniko in southern Athens. The former will fetch some 1.28 billion euros – i.e. more than half the annual target – possibly by this fall, while the latter will fetch 300 million euros, which could come within the first half of the year. Notably, Berlin appears adamant on the sell-off program, even on the privatization of state energy assets, which Finance Minister Yanis Varoufakis opposes.

In fact, during his recent contacts with investors in London, the minister appeared ready to sell rail operator Trainose for 1 euro as long as the buyer commits to an investment plan, while remaining vehemently opposed to the sale of any Public Power Corporation assets.