Athens promises to complete most sell-offs

The privatization program presented by the Greek government to the country’s international creditors as part of ongoing talks between the two sides includes all of the projects previously agreed on – with the exception of the Elliniko development – as well as the preservation of state sell-off fund TAIPED in its original form.

The plan presented to eurozone and International Monetary Fund officials does not include the creation of a Public Wealth Fund and retains TAIPED in the form described in its founding charter. The Greek side, however, does set a number of conditions for privatizations to move forward, such as the use of a portion of revenues to the benefit of the social security system.

The government estimates that revenues from sell-offs this year could come to 1.5 billion euros, mainly from the the concession of 14 regional airports. For the 2015-22 period, Athens anticipates revenues of 7.5 billion euros, which would bring the total, with the addition of the 2011-14 period, to 10.5 billion euros. This is about half the original amount agreed between the troika of creditors and the previous Greek government, for 22.3 billion euros.

The conditions being set by the SYRIZA-led administration are the following: a minimum level of investment in every privatization project; the protection of workers’ rights; commitments that secure benefits for local communities and economies; the state maintaining a significant stake; steps for the protection of the environment and cultural heritage, and a part of revenues going toward pension funds. State-controlled holdings will be used to strengthen a state development bank that the government plans to create.

The proposal, however, does not include anything about the development of the old Athens airport plot on the southern coast at Elliniko, one of the biggest projects that was on the cards. Nor does it mention the privatization of Hellenic Post, the Kavala natural gas deposit facility or the Larco mining company, the latter of which would have brought negligible benefits in any case.

The plan postpones the completion of all major sell-off projects that were supposed to have been completed by 2015 until next year. These include the port authorities of Piraeus and Thessaloniki, Athens International Airport and railway operator Trainose, among others. Furthermore, the securitization of revenues from real estate properties, which in theory has been ready since last year, is seen being put off till 2016.

The creditors insist on keeping the sell-off plan as it was up to December 2014, asking that the government simply update it and fulfill the prior actions required for the projects to be successfully completed. They also stress that the plans for the regional airports and the Elliniko plot must be completed under the terms already agreed.