Privatizations in the pipeline

The minister of economy and finance, Giorgos Alogoskoufis, and the development minister, Dimitris Sioufas, yesterday applied themselves to the bulky file of privatizations, whose importance is projected to increase in the coming months. A major item in the file is the sale of a 35 percent interest in the Public Gas Corporation (DEPA), for which the negotiations with Spain’s Gas Natural have not been completed; it also includes a review of a proposed 30 percent participation of the Public Power Corporation (PPC) in DEPA, and the management of a 325-million-euro bond loan of Hellenic Petroleum (ELPE), which corresponds to 8.21 percent of the company’s share capital; the loan, which matures on July 28, 2004, had been concluded when the company’s share price was 12.50 euros. Yesterday it closed at 7.24 euros. The government has committed itself to continuing the negotiations with Gas Natural which its predecessor initiated. It has, however, told the Spaniards it wants DEPA broken up into four independent firms and to that end it wants to retain the transmission sector, under a new deregulation framework. If the government decides not to allow PPC to exercise its option for DEPA, it must compensate it. Ministers are said to be considering selling larger interests in both DEPA and ELPE, as part of its expansion of the privatization drive. The Finance Ministry’s General Accounting Office is said to be voicing concern that tax revenues and EU investment subsidies will dwindle in the coming months and that the public borrowing requirement will surge at the same time. In this light, an aggressive privatization policy is seen as one option.

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