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“Look who’s talking” about privatisations

Protagon Team

“Look who’s talking” about privatisations

After four and a half years as a government, SYRIZA had not only failed to materialize any decent privatisation (even the Fraport’s Regional Airports (privatisation) has been scheduled by the previous government) but even in cases where it tried to do so, the agreements were so doubtful that they caused an outcry. Two glaring examples: Kassiopi, Corfu and Eleftherios Venizelos (International Airport).

It is not easy to be in opposition when, 70 days ago, you lost by 8.3 points in the general elections and the current government produces work and political results at such a rapid pace. So, SYRIZA decided to grumble about privatisations.

Not exactly about the privatisations themselves, since SYRIZA signed and agreed those with the Troika; nonetheless, they have not been settled due to ignorance and other left – party sins. For example, they are grumbling about how privatisations are now proceeding. Particularly, they complained about a solution found concerning the privatisation of ELPE or because the flagship investment in Elliniko kick-starts via a bank loan; like there was a possibility that all of which would have been financed out of cash.

Here’s the “look who’s talking”! Throughout four and a half years, SYRIZA had not only failed to materialize any decent privatisation (even the Fraport’s Regional Airports has been scheduled by the previous government) but even in cases where it tried to do so, the agreements were so doubtful that they caused a outcry. They tried to concede “Elef. Venizelos” for another 20 years and the price was so low that the European Commission returned the deal back. As for the invest in the area of Kassiopi, Corfu…

Case Study 1: The Colpo Grosso of Kassiopi

The story of Kassiopi begins in 2012, with the TAIPED’s tender for the concession of use – the right to surface, as it is called, of a beautiful forest and picturesque creeks of  490 acres in the north-eastern part of Corfu, for 99 years; afterwards it will be returned to the State. The tender was completed in the following year, under the joint government of New Democracy and Pasok Parties and the bidder, NCH capital, a fund of American interests, paid the first instalment of the whole amount of 23 million Euros in 2016 (being tax exempted by 4.1 million Euros “under investment status”, a decision signed by Yiannis Dragasakis at the end of 2018).

In 2017, the privatisation continued in an… inventive way: under SYRIZA, a tender took place out of the blue concerning the ownership of a part of the property on which 27,000 sqm of luxurious housing may be built. This tender resulted in revenue of 2 million Euros. These areas and infrastructure will not be returned to the State. The bidder was once again NCH Capital – something which was expected: who would give money for an area which, as a subtotal of a larger plot, has already been pledged for another 99 year to a third party? Who would buy something this century so that he can exploit it the next?

When asked by Protagon about the reasoning of the TAIPED’s decision (under the administration of Lila Tsitsogiannakopoulou, Antonis Leousis and Angelos Vlachos) to sell the ownership of part of the property in 2017, the above has replied that “this is a practice followed by real estate development processes, where the part intended to be residencies, the ownership entitlement is always conceded to the investor”. Nevertheless, neither the announcement of the first tender nor the initial offer of interest stated anything about the subsequent concession of land ownership… One might thing that if the initial intention of the TAIPED to sell the above areas in question where the luxurious houses would be built was disclosed from the beginning,  both the investor cycle and the price would be different – and the State would have received far more money.

According to Protagon’s research, the owners of neighbouring areas, to that owned by the State, are expected to pay up to six times more than the amount estimated and paid per buildable square metre for the case of the property in question.

For example, 15 acres of land sold for 2.4 million Euros correspond to 350 buildable sqm – that is, the cost of the building per sqm nears 6,500 €. Correspondingly, if the ownership of 27,000 sqm in Kassiopi was sold for 2 million Euros, adding 23 million Euros from the first tender, the cost per sqm remains significantly lower that the above: approximately 920 Euros.

Case Study 2: They gave El. Venizelos for a snip

In 2017, five SYRIZA ministers signed the decision on the 20-year concession of the Athens International Airport, from 2026 to 2046, stating that the price would be € 484 million. Nonetheless, several months afterwards, upon the intervention of the European Commission, the price was more than doubled to 1.1 billion Euros (exc. VAT). If this is not a scandal, then what is?

The 2017 decision was signed by the then Ministers of Economy and Development Dimitrios Papadimitriou, Environment George Stathakis, Labour Efi Achtsioglou, Transport and Infrastructure Christos Spirtzis and Finance Euclid Tsakalotos. “As consideration for the extension of the Contractual Period, the Airport Company will pay to TAIPED a nominal amount 483,870,968.00 Euros (plus current VAT) in cash”, was stated in the decision, and the timetable for partial payments was also designated. In December 2018, the Competition Commissioner Margrethe Westager announced that the European Commission found that the initial value of the concession was based on economic and business consideration which were not in line with market conditions. “A private operator would not have accepted such an offer and therefore an extension of the concession on those terms would constitute a State Aid”, the Commissioner noted.

As it turned out, the European Commission protected the interests of the Greek State better that the Greek side itself, which is not confined to the five above mentioned SYRIZA ministers. The list is complemented by the members of TAIPED – including its then head Stergios Pitsiorlas during the first phase of the negotiations which resulted in 484 million Euros – but also the representatives of the Greek Government in the Board of Directors of the Athens International Airport.

The enormous difference between the original and the final price was characterised by the opposition as scandal, while cycles in the KINAL party were addressed to the Greek justice system, asking if anyone was interested in the harm of public interest.

Source: https://www.protagon.gr/themata/koita-poios-milaei-gia-tis-idiwtikopoiiseis-44341910814


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