Greece privatisation: Myth or reality?

Hellinikon Metropolitan Park. Former Olympics site the Hellinikon Metropolitan Park is set for sale later this year

Visit any one of the Greek state's Opap betting shops and it's pretty hard to fathom quite what is going on.

Groups of mainly men who can probably ill afford the price of a lottery ticket sit around staring at electronic screens showing grids of random figures, all hoping against hope that their numbers will come up.

It's a fine metaphor for Greece's wider - and so far wildly unsuccessful - drive to raise billions of euros to help offset the country's punishing debt repayments.

The 700m-euro (£605m; $913m) sale of a third of the Opap business to a Greek-Czech investment fund is the first of a string of privatisation deals required under the international bailout.

Stelios Stavrides Stelios Stavrides aims to raise 4.5bn euros by 2014

But the sale remains mired in a row over future contract obligations for Opap to use specified Greek technology suppliers.

You can't bet on the outcome of the sale in any of Opap's stores. But the odds on it all being completed on the current terms are lengthening by the day.

Not for the first time in Greece, a transaction that looked done and dusted is anything but.

It also comes after the recent failure to dispose of Depa, the national gas utility. Mooted buyer Gazprom pulled out amid a wider geopolitical tussle over Russia's domination of energy supply in Europe.

Looking for a billion euros

Start Quote

Nobody's dream is to be working in the public sector. It was the case for 40 years, but it's now the nightmare of today”

End Quote Stelios Stavrides Hellenic Republic Asset Development Fund

So where does this all leave the sell-off programme now? Estimates are that it will be at least a billion euros short of the 2.6bn-euro target this year. It's all slipped a long way from the initial talk of netting 50bn euros from sales.

The man in charge of the privatisations who has to take the rap for the latest setbacks is Stelios Stavrides, an architect of the successful transformation of the Athens Water Board and now chief of the Hellenic Republic Asset Development Fund.

He's only been in the job for three months. But he's already under intense pressure after the seeming failure to anticipate and resolve the setbacks with Depa and Opap. He cheerfully admits the state or the troika of international lenders may demand his scalp.

Yet in the face of all the obstacles from angry unions and interfering politicians, he exudes an almost missionary-like zeal for such a thankless task.

Brandishing a new and long list of sell-offs to come, he insists his organisation has learnt a lot and will be back on course soon - netting its target 4.5bn euros by 2014.

"We can catch up and bring in the 4.5bn-euro target for the two years if we don't have political crises, if people act responsibly and deliver," he says.

Fleeing the public sector

Mr Stavrides and his team have just moved into offices once occupied by a news agency. Something of the atmosphere of the place must have rubbed off because after years of resistance in Greece, the agency is keen to be open about detailed progress in freeing Greek utilities, land and resources from the dead hand of the state.

Old airport jets Regional airports are up for sale

Mr Stavrides believes the benefits of private investment and ownership are simply not understood by many politicians or unions who have grown up under an entirely different model.

He says sell-offs are simply the only option if Greece is ever to see some growth. What he implies, but can't quite bring himself to say, is that there is no escaping the immediate pain while you wait for new and more productive jobs to be created further down the line.

"The public sector has shrunk dramatically in the past four years, and in addition the income of the people has fallen dramatically. So nobody's dream is to be working in the public sector. It was the case for 40 years, but it's now the nightmare of today," says Mr Stavrides.

But the trouble is that as long as Greece remains on the financial edge, with so many unanswerable questions about its economic future, some of the best potential investors are walking away.

Greek assets for sale

  • Depa - gas utility
  • Opap - state betting chain
  • Athens International Airport and regional airports
  • Hellinikon Metropolitan Park - coastal site of former Athens airport
  • Eyath - Thessaloniki water and sewage
  • A2 east to west motorway
  • Hellenic Petroleum
  • Ports and marinas
  • Hellenic Post

Source: Hellenic Republic Asset Development Fund

Time after time, the list of interested parties in any given state asset is down to one or two by the end of the process. This is one reason why the sale prices achieved to date are low.

These are effectively fire sales of assets that Greeks see as their collective birthright.

Riches at the waterfront

A former deputy mayor of Athens and MEP, Theodoros Skylakakis, tells me that the unholy rush to sell in today's market is inexplicable because it's the troika who will take the proceeds - and they need to maximise every cent of the proceeds.

"The process has been a disaster from the beginning, when the troika said we could get 50bn euros," Mr Skylakakis says. "Now its 20bn [euros] in seven years. Everybody knows the seller is under distress, so there just aren't enough buyers.

"All the assets are natural or legal monopolies so the investment will be small and the buyer will be in a position to milk these assets," he says.

"So we need the state to take stronger control of these sectors, and ensure there are more buyers than one bidder for each."

Former Athens Mayor Theodoros Skylakakis Mr Skylakakis thinks the state needs to take more control of the situation

One landmark asset slated for sale in October this year is the Hellinikon Metropolitan Park. This is the vast former Olympic site on the coast.

Before that, part of the area was the old Athens airport. In total it is three times the size of Monte Carlo. But it's all been derelict for well over a decade.

Numerous airport buses still sit outside the forlorn terminal buildings, and a trio of unwanted Olympic Airways jets are parked at the end of the runway.

Only a fraction of the Hellinikon area will be built on initially, but four named major investors are known to be interested.

The transformation of the Barcelona waterfront after the Olympics is sometimes held up as a model of just what could be achieved here.

Today, the abandoned airport stands as a contemporary monument to Greece's seeming inability to make use of its best assets.

A new-look Athens waterfront could be a turning point.

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