Development Minister Nikos Christodoulakis has asked newly licensed investors in the production of electricity with natural gas to submit written proposals on how to overcome problems that seem to be casting the first shadows on the deregulated power market, launched in February. Sources said that during a meeting with the minister and Energy Regulatory Authority (RAE) President Pandelis Kapros on Tuesday, representatives of the already licensed major producers, the Kopelouzos group, Hellenic Petroleum, Alfa Alfa Holdings, the Mytilineos group, GEK-Terna, EdF/HED and Cinergy, aired serious concerns over cost factors which they said made implementation of investment plans impossible for the time being. They said the problems required urgent attention. The major area of concern is natural gas transportation costs. Dimitris Kopelouzos hinted at privileged treatment of certain competitors by the Public Gas Corporation (DEPA), whose former managing director, Savvas Papaphilippou, is now head of HED. For its part, the EdF/HED consortium was said to have expressed disagreement with the establishment of an interim period during which the Public Power Corporation (PPC) would act as a single buyer of the electric power produced, as proposed by Christodoulakis, saying it was in a position to supply power directly to consumers. The licensees are to submit their observations to the ministry and RAE, which is to confer with DEPA on the issue next week and again with the companies on October 16. An equally important question concerns DEPA’s ability to meet the projected demand of all the planned units. A third factor is the levies which the PPC will charge for connecting the producers to the national grid, a problem related to PPC’s unbundling of particular production cost factors, on which the level of the charge will depend. The corporation has said it will complete the job soon. According to sources, the majority of licensees said they were as yet unable to secure clients and, consequently, bank loans for the projects. A plan put forward by RAE for pre-purchasing power agreements totaling 800 MW was a first step in the right direction but required further elaboration and was not enough to solve the problem. They also claimed that the price of electricity would inevitably rise as the country’s power deficit was projected to reach 600 MW after 2004 and – according to RAE – 6,000 MW by 2010. Some of the prospective producers have called for PPC not to construct any more plants beyond those already announced so that they would be able to plan their own. The first six licenses granted represent a total production capacity of 2,156 MW by 2004. PPC privatization Tuesday’s meeting took place in the wake of press reports that three large European power producers, France’s EdF, Italy’s ENEL and Germany’s RWE, were in negotiations for the acquisition of 3-percent stakes in PPC each. However, PPC’s Managing Director Sergios Nezis categorically denied the existence of such a scenario, saying there were no contacts whatsoever. Christodoulakis also denied the reports, as well as suggestions that the government was considering selling off PPC plants. The advisers to the planned part-privatization of PPC and representatives of the three European companies also stated complete unawareness of any plans. Sources said the issue arose as a result of a misunderstanding during a meeting between Christodoulakis and PPC trade unionists. Nezis stated PPC is now focusing on preparations for its part-privatization through listing on the Athens bourse and is not considering any strategic agreements with foreign companies. The corporation is expected to submit a draft plan to the bourse next week, for the flotation of between 15 and 20 percent of its share capital. Its pre-accession aid is a fraction of what Central and Eastern European countries were receiving from the EU under various programs, which did not, unlike Cyprus, have market economies to start with.