By Jonathan Stearns & Natalie Weeks
In the mountains of northern Greece (MACEDONIA) lies an $800 million power plant
whose future may help determine whether the country can salvage its euro
status.
The facility near Florina (MACEDONIA), a town known as “Where Greece
Begins,” is the most modern of four production units that
state-controlled Public Power Corp. (PPC) is scheduled to sell to
competitors to meet four-year-old European Union demands that the
country deregulate its energy market.
The most powerful Greek
union is now threatening nationwide blackouts at the height of the
summer tourist season to derail the plan.
“We will make saving PPC
a cause for all Greeks,” Nikos Fotopoulos, head of the 18,000-strong
GENOP union, said last month in his Athens office adorned with photos of
communist revolutionaries including Vladimir Lenin and Leon Trotsky.
“We
fight our battles with faith and passion, and we fight them hard. A
serious state must control businesses of strategic importance.”
While
on the surface PPC is another tale of Greek conflict during the worst
economic crisis of modern times, it encapsulates how Greece has found
itself at the sharp end of Europe’s struggle to keep the euro intact and
what the country still faces to defend its place in the currency.
Founded
in 1950 to distribute domestically generated electricity to Greek
citizens, PPC is a microcosm of political protection, vested interests
and reliance on foreign financing that have defined the economy for
decades.
It is the country’s biggest employer and its eight plants
fired by the soft, brownish-black coal called lignite meet half of
Greece’s power demand. PPC is fighting to keep its monopoly on the fuel,
which is so vital to the company it’s in the process of moving a whole
village to mine more of it.
Since forming a government after the
June 17 election, the second in six weeks, Prime Minister Antonis
Samaras and his ministers have been in talks with the EU, European
Central Bank and International Monetary Fund to keep aid flowing during
the fifth year of recession.
They are working on identifying 11.5
billion euros ($14.2 billion) of further budget cuts and are 3.5 billion
euros to 4 billion euros short of the target, Finance Minister Yannis
Stournaras said this week.
Samaras, 61, has vowed to make the sale
of state-owned assets a priority and last month appointed former PPC
Chief Executive Officer Takis Athanasopoulos as chairman of the
organization managing the privatization program.
Athanasopoulos,
68, a U.S.-trained business manager and university professor, battled
Fotopoulos, 48, at PPC during his tenure over issues ranging from job
cuts to teaming the company with partners such as Germany’s RWE. PPC
employs 20,000 people, compared with about 38,000 in the mid-1990s, and
is now restricted to one new hire for every 10 departures.
PPC is a
test of Samaras’s ability to prove to the euro area and IMF that Greece
is meeting their demands to open markets to competition, scale back the
state and cut red tape.
The asset-sale program also may involve
lowering the state’s stake in PPC to a minority from the current holding
of 51 percent. The company’s shares collapsed by 61 percent in the past
year and its net debt at the end of the first quarter stood at 4.85
billion euros.
Greece first has to resolve a dispute with the EU over PPC that predates the debt crisis.
The
fight centers on Greece’s failure to heed EU competition rules and
affects the Melitis electricity plant near Florina in the northern Greek
region of Macedonia, a focal point of the 1946-1949 civil war in which
communist forces were defeated.
Melitis, with a Russian-built
generator and emissions- control technology from German units of
France’s Alstom SA (ALO), is PPC’s state-of-the-art prized asset.
EU
regulators ordered Greece in March 2008 to loosen PPC’s stranglehold on
lignite, saying competitors face unfair market barriers. The EU said
Greece violates European law by giving PPC “quasi-exclusive” access to
the coal.
PPC depends on lignite, among the most polluting fuels,
to help compensate for losses in its natural-gas business. The
Athens-based company said its cost of production is about half as much
in lignite as in cleaner gas.
Greece is the third- largest lignite
producer in the EU after Germany and Poland, according to the European
Association for Coal and Lignite.
“We don’t consider giving
existing lignite units to private groups an investment in, and
contribution to, the country,” Fotopoulos, the union leader, said in a
July 26 interview. “The only winners from giving ready-made lignite
factories to private groups are the private groups.”
The previous New Democracy government proposed to meet the EU’s 2008 deregulation order by expanding mining capacity.
Seeking
to give competitors to PPC access to 40 percent of exploitable Greek
lignite reserves, the government decided to invite bids for exploitation
rights at four deposits, including one called Vevi from which the
nearby Melitis plant is counting on getting supplies.
Greek
elections in October 2009 produced a PASOK government that pulled the
plug on that plan, which EU regulators had approved two months earlier.
The
PASOK government of former Prime Minister George Papandreou, pledging
to promote cleaner energy, ended up preparing to sell four existing PPC
power units, including Melitis, and to limit new exploitation rights to
the nearby Vevi deposit, which had been mined until about 10 years ago.
The
Pasok plan remains on the table as the new Samaras administration
evaluates options. The other three units on the sale list include two at
the Amindeo power station southeast of Melitis and one in Megalopolis
in southern Greece.
“The government is committed to proceeding
with the privatization of PPC in an organized fashion,” Assimakis
Papageorgiou, Greece’s deputy energy minister, said in an Aug. 1 e-mail.
He declined to elaborate on the plans, saying they are still being
developed.
Time is pressing not just for the government, which is
scrambling to meet an Aug. 20 deadline to repay 3.1 billion euros of
debt held by the ECB, but also for Melitis. It has been forced to take
stopgap steps, including importing coal, after losing supplies from two
nearby lignite mines.
One mine, Achlada, which furnished more than
half of Melitis’s lignite in 2011, shut down temporarily earlier this
year as Greece’s economic slump deepened. The other, Klidi, closed four
years ago after a hillside collapsed.
The 330-megawatt unit at
Melitis, whose technology limits discharges of pollutants such as sulfur
dioxide, nitrogen oxides and dust particles, is getting some of its
lignite from as far away as Turkey and Bulgaria, according to
Constantinos Tzeprailidis, operation department manager at the plant.
“It’s
a little difficult,” Tzeprailidis said in a July 28 interview in his
office that looks onto countryside where sheep graze and wheat, corn and
sunflowers grow. “It’s a shame to have national wealth that’s not
exploited.”
About 75 kilometers (47 miles) south of Melitis, amid
the lignite mines that make up Greece’s energy heartland in the Kozani
area (MACEDONIA), PPC’s hunger for the fuel is more conspicuous.
The landscape is marked by active open-pit mines that supply larger, older, PPC power stations nearby.
These
include Agios Dimitrios, the company’s largest lignite-fired station
that alone meets about 20 percent of Greece’s electricity consumption,
and Ptolemaida, the oldest station where power generation began in 1959.
“We
work 24 hours a day, 365 days a year,” Olga Kouridou, director of
mining for PPC in the region, said on July 27 as she approached a
50-meter precipice in the area’s largest mine.
A German
bucket-wheel excavator, the size of a multi-story building, churned the
earth and dozens of dump trucks roared down the makeshift dirt roads.
“We don’t stop at all. We have enormous activity,” she said.
Residents
of the nearby village of Mavropigi can attest to that. The village,
whose name in Greek means “black source,” is due to be moved within
months to make way for an expansion of mining by PPC. Mavropigi will be
the sixth village in the Kozani area to be relocated since the 1970s
because of mining.
Dimitris Emmanouil, a retired construction
worker who was born in Mavropigi in 1941 and got married there, said he
and other residents hear the ground moving at night as a result of the
digging for lignite.
“It’s dangerous now because the soil is
slipping,” he said on July 27 while seated at a table in a closed-down
café in Mavropigi, where earthquake-like faults in the ground are
visible. “There’s no other choice. The village has to go.”
PPC
needs the lignite under Mavropigi and surrounding fields for a planned
1.4 billion-euro unit at the Ptolemaida (MACEDONIA) plant, according to Ioannis
Kopanakis, an Athens-based general manager for generation at PPC.
The
company is asking German development bank KfW to arrange a 700
million-euro loan and intends to fund the rest itself, he said.
“The
matter has gone to the highest decision-making levels in Germany,”
Kopanakis said in a July 30 interview. “We expect progress in these
issues in the near future.”
This is the kind of project that PPC
representatives say highlights the company’s importance to Greece,
boosting investment, jobs and technological expertise.
“It’s the
last producer on this scale that is left in Greece,” said Kouridou, the
mining director in the Kozani region(MACEDONIA). “We need to keep that. If this
stops, the whole area will lose out, but so will Greece.”
[Bloomberg]
9/8/12
----
GR
FR
DE
ES
IT
RU
EU
No comments :
Post a Comment
Only News