Ministers at odds over energy privatizations

Ministers at odds over energy privatizations

Statements by Energy Minister Lafazanis over privatizations in the energy sector appear at odds with Greece's recent commitments.

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ΓΡΑΦΕΙ: THETOC TEAM

(Reuters) - Greece will not go ahead with privatizing its dominant electricity utility PPC (DEH) or power grid operator ADMIE, Energy Minister Panagiotis Lafazanis said, despite promising its creditors not to halt sales that are underway.

Lafazanis's comments appeared to mark the first sign of open dissent from a minister on the far left flank of the new Greek government over a deal with the euro zone to extend the country's bailout program.

The Public Power Corporation has already launched a tender to sell a 66 percent stake in its power grid operator ADMIE, and several investors including state Grid Corporation of China (SGCC) and Italian grid operator Terna have been shortlisted as possible buyers.

"The tender for ADMIE will not go ahead," Lafazanis told Ethnos newspaper in comments published on Wednesday. "The companies have not submitted binding bids so it will not be completed. That is also the case with PPC."

Finance Minister Yanis Varoufakis, who has overall responsibility for privatization, said Greek law allows the government to change the terms of sales that are underway and to examine their legality.

He said the government would not cancel state sales that have already been completed but neither would it sell off assets cheaply. "We don't want to sell the family silver of the Greek state at insultingly low prices," Varoufakis told Real FM.

The government of Prime Minister Alexis Tsipras had to stage a climbdown to secure agreement last Friday from the euro zone on extending the bailout program by four months.

This included an undertaking on privatizations given by Athens in a list of reforms which euro zone finance ministers approved on Tuesday. The English original of the list says the government will respect the tender process where it has been launched, whereas a Greek translation provided by a government official speaks of respecting the procedure "where the process of submitting bids has begun".

Lafazanis told Reuters last month that the government was "absolutely" opposed to a mining project in northern Greece undertaken by Eldorado Gold Corp (ELD.TO) of Canada.

However, a senior energy ministry official said on Wednesday that the government would not block the mining operation, although it would review permits for a processing plant at the site.

"The mining will not stop," the official told reporters, adding: "As a ministry we have ordered some of the permits to be recalled to re-examine whether the activity of the company is the one described in the approved permits."

Tsipras is trying to satisfy domestic public opinion, European partners and lawmakers of his radical Syriza party, while facing dissent from some supporters on the far left.

Veteran leftist Manolis Glezos, a Syriza member of the European Parliament, accused Tsipras on Saturday of failing to fulfill the party's campaign promises.

The previous conservative-led government had passed legislation to spin off PPC and sell about 30 percent of its production capacity under a privatization plan agreed with the country's EU/IMF lenders.

Soon after taking office last month, the new government promised to halt a series of privatizations.

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