A man walks past the headquarters of Bank of Greece in Athens. As part of its commitments under the €86bn ($97bn) rescue loan from international creditors, Greece aims to raise €1.4bn from privatisations this year.
Reuters/Athens
Greece will miss its revenue target from asset sales this year due to delays in a €1.2bn airport deal, the head of its privatisation agency said yesterday, in a setback to efforts to meet the terms of its new bailout.
As part of its commitments under the €86bn ($97bn) rescue loan from international creditors, Greece aims to raise €1.4bn from privatisations this year.
It has a patchy record of meeting such targets, and Stergios Pitsiorlas said reaching the 2015 figure was also now “unfeasible”.
“On the other hand, I think it is realistic that we achieve the 2016 targets,” he told Reuters in an interview.
Greece aims to cash in €3.7bn from asset sales next year and €1.3bn in 2017.
At the end of last year it chose Germany’s Fraport and its Greek partner, energy firm Copelouzos, as the preferred bidder to operate 14 regional airports in tourist destinations — one of the biggest privatisations since the start of the debt crisis in 2009.
But the agreement, along with others including the sale of 67% in its biggest ports, Piraeus and Thessaloniki, was halted soon after the leftist Syriza-led government came to power in January.
Although the sales are now back on track, Greece may not conclude the airport transaction on time to receive the €1.2bn from the deal by December, Pitsiorlas said.
“By the end of 2015, HRADF will implement a very important part of the first phase of this programme but the €1.4bn (revenue target) is unfeasible,” Pitsiorlas said.
Greece has raised about €3.5bn from asset sales since it signed its first bailout in 2010, when the privatisation fund was set up. That is far below an original target of €50bn that has been progressively cut amid a lack of investor interest and political will.
Five governments have held office in Greece over the same period and Pitsiorlas is the fund’s sixth chairman.
He said he expected the Fraport deal to be concluded this year but it would take several months for the concession to start and Greece to receive the money.
“If Fraport is not ready to sign the contract early in October when its letter of guarantee expires, we could discuss a short extension,” Pitsiorlas said.
Fraport said in August it no longer expected the deal to be concluded this year. Pitsiorlas said HRADF’s board will meet today to approve a change in the terms of the tender for the privatisation of Thessaloniki port.
Investors will be asked to submit a bid for a 51% stake by February instead of the 67% originally put up for sale, with the option to acquire an extra 16%.
“All eight shortlisted firms are still very interested and the winner will have to invest about 100mn euros,” he said.
Dutch APM terminals, Swiss Duferco Holding, Russian Railways, Philippines’ International Containers Terminal Services and Japan’s Mitsui & Co were among the bidders. The asset sales have also faced legal hurdles.
Greece agreed in 2013 to sell 66% of natural gas grid operator DESFA to Azerbaijan’s state-owned oil company SOCAR. But the €400mn transaction has been delayed due to EU antitrust concerns.
Pitsiorlas said the sale will be concluded this year and that SOCAR, which confirmed its interest in acquiring the stake last week, would address the EU’s concerns but divesting 17% of DESFA to a third entity.
“Right now, there is strong interest by European firms, such as Belgium’s Fluxys, to participate in the final scheme,” Pitsiorlas, a lawyer, said.
Pitsiorlas was also upbeat about the sale of a luxury seaside resort, Astir Vouliagmenis, outside Athens to an Arab-Turkish fund. The sale was clinched in 2013 but Greece’s top administrative court blocked it last year, saying the property’s urban development scheme violated Greek law.
“I reckon that negotiations with the investors ...will conclude soon so that a solution can be found that will satisfy their business plan and the terms set by the (court).”
Greece will also start implementing a €915mn deal for the lease of a former airport site, Hellenikon, to Lamda Development immediately after a September 20 snap election, he said.
