Shipyard sale in jeopardy as buyer stalls on contracts

The agreement to sell state-owned Hellenic Shipyards to Germany’s Howaldtswerke Deutsche Werft-Ferrostaal (HDW), reached last month, is in serious danger of unraveling, as the Germans insist that a number of major contracts, including one with the Greek navy for the construction of submarines, and one with Hellenic Railways (OSE) for the construction of wagons, be revised. HDW wants the penalty provisions for delays in delivering the products deleted from the contract but OSE is adamant about the issue. One reason a rival consortium failed in its bid to acquire Hellenic Shipyards was that it had expressly called for renegotiating these contracts. If HDW wish were granted, the validity of the bidding process could be challenged. At the moment, the acquisition awaits the go-ahead from the European Union’s Competition Commission, which is not expected before the year’s end. The shipyard issue also affects the sale of state-owned Hellenic Bank for Industrial Development (ETBA) to Piraeus bank. ETBA was the majority shareholder in Hellenic Shipyards. If the shipyard sale falls through, the ETBA sale, concluded for 175 billion drachmas will also collapse. Deputy Development Minister Alexandros Kalafatis said yesterday the, in case negotiations with HDW collapse, the government had three options: open talks with the second bidder, the Tavoularis Group, reincorporate the Shipyards back into the state fold as a defense industry, or launch another tender for its sale. In addition to the tram loan, Pachtas also took out a loan of 10 billion drachmas (29 million euros) from the European Investment Bank for the construction of a detour bypassing Patras in central Greece. The 18-km-long route is estimated to cost 83.7 billiion drachmas, with part of the funds expected to come from European Union structural funds.

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