ECONOMY

OTE’s equipment lies unused

Warehouses packed with unused telecommunications equipment worth millions of drachmas, the result of Hellenic Telecommunication Organization’s (OTE) policy of blindly trusting its preferred suppliers to provide materials, could turn out to be the company’s next scandal. OTE’s own inventory, dated September 30, 2001, showed that the equipment stored in its warehouses is worth 85.2 billion drachmas. The cost of the telecommunications gear which OTE paid for in cash has thus gone up by 19 percent in the nine-month period from the 72-billion-drachmas-worth they recorded on December 31, 2000. The corresponding accounting value of the equipment however did not show up on last year’s balance sheet. During a meeting of OTE’s regional council attended by the top management and some 100 top executives between November 9 to 11, the subject of the unused equipment came up during the discussion, with some calling it a scourge for the company that could even be characterized as bad management. T. Nikakis, the manager responsible for equipment handling was particularly revealing as he confirmed the continuation of the company’s procurement policy which has resulted in 82.5-billion-drachmas-worth of useless equipment. He said that the value of OTE’s stored equipment would have come close to 100 billion drachmas if it had not recently sold 10.7-billion-drachmas-worth of gear. From this it is clear that OTE is generously financing its suppliers and boosting their profitability via its procurement contracts. In contrast, OTE’s profits are being eroded away. OTE sources told Kathimerini that in 1997 the company cleared out some of the equipment from the warehouses in order to make room for 400-billion-drachmas-worth of new gear. This situation is evolving as if OTE is still operating as a monopoly and the software company Intracom was its subsidiary. Participants at the regional meeting were told of OTE’s other supposedly good investments, among them the unreliable monitoring system at the warehouses. Council members also charged that they were being given equipment for which they had not requested, while other OTE executives said they attributed some of the unused equipment as part of their stock. OTE’s equipment manager said in a memo that there were errors in listing the materials in terms of what is new, used or cannot be categorized, and that a significant amount of old-technology equipment was accumulating. However, this does not mean we will avoid all the effects of the ongoing retrenchment in the international economy. There will be less demand for our exports, and investment interest by foreigners in Greece will decline.