Privatizations program will struggle to make revenues target of 2 billion euros

The privatizations program is again facing delays, this time due to new obstacles raised either by political developments or the stalling tactics of certain government officials who are ideologically against the sell-offs. Hopes of reaching the target for privatization revenues of 2 billion euros this year are rapidly diminishing, as key projects that would have contributed significantly are being put off. The original target for 3.5 billion is now but a pipe dream.

So far, the only certain sum is the 1.5 billion euros from the contracts of the state sell-off fund (TAIPED) with Fraport for the regional airports (1.23 billion) and with Cosco for Piraeus Port Authority (280 million). All other projects that could fetch significant revenues are under dispute.

For instance, the development of the old Athens airport at Elliniko is unlikely to bring in any takings this year, despite the optimism recently expressed by Finance Minister Euclid Tsakalotos in Parliament. The government has not yet reached the deal it desires with the preferred bidder.

The only projects that could help the budget within 2016 are Athens International Airport (AIA) and OTE telecom. However, the former is opposed by the Infrastructure Ministry and the latter is seen as bearing too heavy a political cost for this government.

Of course as the bailout review proceeds, the government will come under increasing pressure from its creditors to complete some key privatizations. In this context, the AIA negotiations are expected to start in the next few days, with TAIPED and the Canadian stakeholders eager to reach a deal, which would be possible in the next four months. Should there be an agreement, the revenues are likely to top 200 million euros.

The government is also examining the case of its 10 percent stake in OTE, which could be used as a stopgap solution in case the privatizations program looks like missing its target. The state revenues from the sale of that stake would amount to 300 million euros, with another 200 million going to the Social Security Foundation (IKA).

Other sell-off projects, such as rail companies Trainose and Rosco, Egnatia Odos, Thessaloniki Port Authority and so on, are unlikely to fetch any revenues within this year.