ATHENS--Greece is considering speeding up the sale of the
country's principal port, among a raft of assets, as it scrambles
to plug a giant hole in its sputtering privatization program, the
head of the country's privatization agency said.
In an interview with The Wall Street Journal, Stelios Stavridis
said the plan could involve the sale of the government's 74% stake
in the Port of Piraeus S.A., known as OLP, as well as a 30-to
40-year management concession, a move that could potentially help
cover a large part of an estimated 1 billion euro shortfall. The
sale of the port stake, tentatively planned for 2014, could be
brought forward to this year, Mr. Stavridis said.
Such a deal, combined with the possible sale of Greece's
national railroad, could draw strong interest from Chinese
investors, who have already invested in the container terminal
operations of the port.
"I think [the port] is a mature option, the Chinese investors
already have presence there and recently Prime Minister Antonis
Samaras made a visit to China," Mr. Stavridis, chairman of the
Hellenic Republic Asset Development Fund, said. "We have several
different options; by the end of next month we will have finalized
our decision." He didn't name any specific potential investors from
China.
In 2009, Chinese port operator Cosco signed a 35-year EUR500
million ($670.6 million) concession to manage the container
terminal of the port. According to Greek officials it has signaled
that it is interested in expanding its operations there.
Greece's ambitious but long-delayed privatization program
stumbled badly last week, when the country failed to receive a
single bid for the sale of its natural-gas company Depa, after the
Russian giant OAO Gazprom withdrew, setting back the country's
efforts to raise billions of euros from asset sales to help pay
down a mountain of debt. Greek officials blamed the European
Commission for derailing the deal amid concerns about Moscow's
already tight grip on the European gas market.
Since its first bailout loan in May 2010, Greece has
consistently failed to meet its privatization targets and has
repeatedly scaled back an earlier goal of raising EUR50 billion
from asset sales by the end of the decade. It is now aiming to
raise EUR11.1 billion in privatization proceeds by the end of 2016,
EUR25 billion by 2020 and EUR50 billion over an unspecified
period.
This year, Greece hopes to raise some EUR2.6 billion, about half
of which would have come from the sale of Depa and its sister
company, gas-grid operator Desfa. To date, the government has sold
roughly EUR900 million worth of assets, thanks to the privatization
of state gambling monopoly OPAP SA for EUR650 million, but that
deal has yet to close and has become bogged down in internal
disputes between the bidders and the management of the company.
Under the terms of the bailout, any failure to meet those
targets means Greece would have to take additional austerity
measures to cover some of the shortfall, something the government
says it is unwilling to do, and it could also force management
changes at the privatization agency.
The government said it would relaunch Depa's sale but this may
not be completed in time for the country to meet this year's
revenue target. Mr. Stavridis pointed out that it could take a year
and a half before the fresh tender is completed.
Other privatizations that could be moved forward include the
main port of northern Greece in Thessaloniki, a remaining 6% stake
the state owns in Hellenic Telecommunications Organization SA, as
well as roughly one-third stake in the country's biggest oil
refiner, Hellenic Petroleum, according to Mr. Stavridis.
A sale plan for Depa "will be relaunched as soon as we know how
to do it and we are certain there is market interest," Mr.
Stavridis said. "It was not a failure, it was because of market
conditions and that is not our fault. But there are alternatives we
can speed up, other things that we can go much faster on. With the
port of Piraeus we can go much faster, with the port of
Thessaloniki we can go faster, with the railroad system, we can go
faster."
Amid the challenges, there is one silver lining. A bid by
Azerbaijan's state-run oil company Socar for Desfa, an offer of
around EUR400 million, is on track, although there were still talks
ongoing about the final terms of the deal. "Desfa is looking good,"
he said. "By the end of the week, or even earlier, we will have
results."
"If we complete Desfa, which we are optimistic about, the whole
dynamic of Depa will change," said the head of the Hellenic
Republic Asset Development Fund.
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