4.4 Privatisation
Privatisation can help to make the economy more efficient and to reduce public debt. The Government and the Privatisation Fund (HRADF) have taken important steps in advancing the privatisation programme forward (e.g., signing of the regional airport agreement, the conclusion of the OLP tender) and is committed to proceed with an ambitious privatisation program and to explore all possibilities to reduce the financing envelope, through higher privatisation proceeds.
Privatisation of all core assets held by TAIPED as determined by its Asset Development Programme is key to stimulate private investment, increase efficiency, and provide financing to the state.
To preserve the on-going privatisation process and maintain investor interest in key tenders, the Hellenic Republic commits to proceed with the on-going privatisation programme. The Board of Directors of the HRADF has already approved its updated Asset Development Plan (ADP) which includes for privatisation assets under HRDAF as of 31/12/2014.
The implementation of this programme aims to generate annual proceeds (excluding bank shares) for 2016, 2017 and 2018 of EUR [1.4]bn, EUR [3.7]bn and EUR [1.3]bn, respectively.
The Government commits to facilitate the privatization process and complete all needed Government actions to allow tenders to be successfully executed. In this respect it will complete all actions needed as agreed on a quarterly basis between HRADF, the Institutions and the Government. The list of Government Pending Actions has been approved by the Board of Directors of the Hellenic Republic Asset Development Fund and is attached to this Memorandum as an Annex and constitutes an integral part of this agreement.
As prior action,
i. the authorities will:
a. Endorse the Asset Development plan approved by HRADF on xx/03/2016 which includes [27] assets. The ADP is attached to this Memorandum as Annex and constitutes an integral part of this agreement. The ADP will be updated on a semi-annual basis and approved by HRADF; and the Cabinet or KYSOIP will endorse the plan;
b. Sign an MoU with the investor at the end of negotiations on Hellinikon for any revisions in the agreement and to proceed to the final stage for concluding the deal;
c. Ratify the Concession Agreement swiftly for the 14 regional airports and, immediately after signature of the aforementioned MoU, for Hellinikon; {those concession contracts have been kept secret from the Greek people, TPP has leaked them in the past}
d. Approve [through KYSOIP] the concession agreement for OLTH in order to proceed with the uploading of the agreement for investors to place their binding bids;
e. Constitute a working group that will formulate a timeline for finalisation of the regional airport and OLP transactions in 2016. This timeline will be shared with the Institutions, and any slippages that endanger the finalisation date will be addressed as a matter of urgency. The working groups will include TAIPED, the Ministry of Finance, the relevant ministries and a representative of the European Institutions;
f. Approve the KYA Approving Pricing Policy for the Toll Station of Promachonas in EgnatiaOdos; approve in the General Assembly of EgnatiaOdos SA the terms of the loan restructuring solution agreed among Egnatia SA and Piraeus Bank;
g. Adopt a law strengthening the independence of the Port Regulator (RAL) as provided in Law 4150/2013 and clarifying the allocation of responsibilities between the port regulator and other port authorities, taking into account the final concession agreement and the upcoming tender for Thessaloniki port authority (OLTH) and potentially other future concessions of smaller ports; the legislation will enhance the port regulator’s independence in order to be able to play an impartial role as supervisor for the execution of the concession agreements and an economic regulator;
h. prepare a report — and draft legislative proposals if needed — on the legal framework of the Hellenic Civil Aviation Authority’s (HCAA) , its compatibility with EU legislation, the concession agreements for the 14 regional airports, including its preparedness to undertake independently its economic regulator role and to supervise in an impartial manner the execution of the concession agreement; (ii) organise [and send invitations] for a workshop to be organised [jointly] [by] the EC’s SRSS and which will be held in May 2016 which will review these reports, provide recommendations to the authorities for revisions, and further technical assistance needed;
i. Conclude the remaining Government Pending Actions identified by the Institutions and HRADF and which are due by [April 2016] and that are not listed in this section.
Other key deliverables
i. The Authorities take appropriate steps, and adopt legislation if needed by [July 2016], on HCAA in line with the recommendations of the EC and of other experts involved in the May 2016 workshop and subsequent technical assistance provided.
ii. By [September] 2016, drawing from technical assistance where needed, the Port Regulatory Authority will prepare its internal regulations and needed laws to ensure its full functionality.
Privatisation, Management and Investment Fund
In line with the statement of the Euro Summit of 12 July 2015 and the Action Plan agreed among the Greek Government and the institutions, a new independent fund (the “Fund”) will be established and have in its possession valuable Greek assets. The overarching objective of the Fund is to manage valuable Greek assets; and to protect, create and ultimately maximize their value which it will monetize through privatisations and other means.The Fund would be established in Greece and be managed by the Greek authorities under the supervision of the relevant European Institutions {in reality, the lenders}. The Fund will be managed by its Board of Directors, overseen by a supervisory Board whose members will selected jointly by the Greek Government and the European Institutions. The Fund is expected to fulfil its objective by adhering to international best practices in terms of governance, oversight and transparency of reporting standards, and compliance. The Fund and its assets will be under professional management separate from the State {the preceeding fund, also under the creditor's control did nothing, and the Greek state will have no say in the way its assets will be sold}. The monetisation of the assets will be one source to make repayments of the new loan of ESM, in line with the Euro Summit Statement {no more is there a goal for 50bn euro from the sales, Greek assets can be sold as cheaply as needed and no money whatsoever will go towards the Greek economy}.
As prior action, the Government will adopt the law establishing the new Fund in accordance with the Action Plan agreed as part of the milestones in December 2015.It will include the transfer of ETAD and all the assets under its management and an initial list of SOEs to the new Fund and include internal regulations on [to be defined].
The Government will, in agreement with the Institutions, request from SRSS formally by [May 2016] technical assistance to assist with determining exclusions from the State-Owned Enterprise, and if needed from the real estate portfolios in order to complete the asset allocation plan. The technical assistance will
«Εμείς αποφασίσαμε ότι δε θα διαγραφεί κανείς»: Οι διοικητικοί υπάλληλοι των Πανεπιστημίων απεργούν και στέκονται στο πλευρό των φοιτητών
Οι διοικητικοί υπάλληλοι των Πανεπιστημίων βρίσκονται μπροστά στον ασφυκτικό εκβιασμό που τους έθεσε η κυβέρνηση, να διαγράψουν φοιτητές/τριες ή να αντιμετωπίσουν πειθαρχικές διώξεις. Στον φόντο αυτής της αποφασης, σχεδόν 300.000…
.
Following the adoption of the law the following actions will need to be completed as key deliverables:
i. The Government will by [June 2016] with the Institutions (a) agree nominations of the Supervisory Board which will be responsible for selecting the Board of Directors; and (b) finalise the remaining internal regulations on [to be specified]which must be fully in line with the Action Plan agreed with the Institutions in December 2015 as part of the 2nd set of milestones;
ii. [placeholder for defining the portfolios of real estate and SOEs for initial transfer] {what is being negotiated is who is going to chose which public companies will sold}
iii. The supervisory Board will compete the selection of the Board of Directors including the CEO [September2016];
iv. The Board of Directors will by end-[September] 2016 be constituted as a body;
v. The Board of Directors will finalise by end-[October] 2016 the outstanding issues of the internal regulations which will be endorsed by the Supervisory Board of the new Fund and approved by the General Assembly;
vi. The Board of Directors will by [November] 2016 appoint the Boards of its subsidiaries; where Boards already exist, and with the exception of HFSF, it {i.e. the lenders…} will review these Boards and replace executive and non- executive members as needed based on the internal rules.
[Drawing from technical assistance to be received by the Hellenic Republic the Government with the management of the new Fund will take all necessary actions to complete asset transfers/allocation for specific classes of assets to be identified by the technical assistance [December 2016] (key deliverable).]
Privatisation can help to make the economy more efficient and to reduce public debt. While the privatisation process has come to a standstill since the beginning of the year, the Government has now committed to proceed with an ambitious privatisation program and to explore all possibilities to reduce the financing envelope, through an alternative fiscal path or higher privatisation proceeds.
To preserve the on-going privatisation process and maintain investor interest in key tenders, the Hellenic Republic commits to proceed with the on-going privatisation programme. The Board of Directors of the HRADF has already approved its Asset Development Plan (ADP) which includes for privatisation assets under HRDAF as of 31/12/2014.
The implementation of this programme aims to generate annual proceeds (excluding bank shares) for 2015, 2016 and 2017 of EUR 1.4bn, EUR 3.7bn and EUR 1.3bn, respectively.
As prior action, and to re-launch the privatisation programme the Government will adopt these measures:
- i. The authorities will endorse the Asset Development plan approved by HRADF on 30/7/2015. The ADP is attached to this Memorandum as annex and constitutes an integral part of this agreement. The ADP will be updated on a semi-annual basis and approved by HRADF; and the Cabinet or KYSOIP will endorse the plan;
- ii. The Government and HRADF will announce binding bid dates for Piraeus and Thessaloniki ports of no later than end-October 2015, and for TRAINOSE ROSCO, with no material changes in the terms of the tenders;
- iii. The authorities will take irreversible steps for the sale of the regional airports at the current terms with the winning bidder already selected;
- iv. The authorities will conclude around 20 selected pending actions identified by HRADF.
The Government commits to facilitate the privatization process and complete all needed Government actions to allow tenders to be successfully executed. In this respect it will complete all actions needed as agreed on a quarterly basis between HRADF, the institutions and the Government. The List of Government Pending Actions has been approved by the Board of Directors of the Hellenic Republic Asset Development Fund and is attached to this Memorandum as an Annex and constitutes an integral part of this agreement.
In line with the statement of the Euro Summit of 12 July 2015, a new independent fund (the “Fund”) will be established and have in its possession valuable Greek assets. The overarching objective of the Fund is to manage valuable Greek assets; and to protect, create and ultimately maximize their value which it will monetize through privatisations and other means.
The Fund would be established in Greece and be managed by the Greek authorities under the supervision of the relevant European Institutions. The Fund is expected to fulfil its objective by adhering to international best practices in terms of governance, oversight and transparency of reporting standards, and compliance.
By October 2015 the authorities shall appoint an independent Task Force to identify options and prepare recommendations on the operational goals, structure and governance of the Fund to be created. The Task Force would report by December 2015, and the government, in agreement with the institutions, will take steps to implement the recommendations by March 2016 (key deliverable). The mandate and composition of the Task Force would be drawn up by the authorities, in agreement with the European Institutions and in consultation with the Eurogroup. The authorities may request technical assistance on this matter. The mandate of the Task Force will include:
1. Identifying the possible assets which could be part of a new Fund and the best options for their monetization: particular attention would be paid to extracting value from the real estate assets of the Hellenic Republic including those already held by ETAD.
2. Identifying appropriate governance arrangements of the new Fund, including whether there should be specific sub-entities for different types of assets within the Fund drawing upon, where relevant, the experiences of entities such as Hellenic Republic Asset Development Fund (HRADF) and ETAD; whether such existing entities would be reformed and maintained separate to the Fund, terminated upon conclusion of their mandate, or absorbed into the new Fund.
3. Putting forward a proposal for the transition to the new Fund to ensure continuity from the previous arrangements, including the possible transfer of assets within the Asset Development Plan.
4. According to the Euro Summit Statement the monetization of the assets will be one source to make the scheduled repayment of the new loan of ESM and generate over the life of the new loan a targeted total of EUR 50bn of which EUR 25bn will be used for the repayment of the recapitalization of banks and other assets and 50% of every remaining euro (i.e. 50% of EUR 25bn) will be used for decreasing the debt to GDP ratio and the remaining 50% will be used for investments. The Task Force will identify options and make recommendations on how this will be operationalized.
5. Options for a legislative framework that would be adopted to ensure transparent procedures and adequate asset sale pricing, according to OECD principles and standards on the management of State Owned Enterprises (SOEs) and best international practices. Particular attention will be paid to maximising the value generation of the Fund’s assets and to avoid circumstances of asset sales below their fair value.
6. Based on international best practises, assess possible strategies to be designed and executed to monetise the assets through privatisation and other means; and examine options for the professional management of the assets.
7. Examine statistical classification of the new entity in terms of general government classification and in particular the implications for the issuance of debt or guarantees to ensure that these would not burden gross Greek debt or create contingent liabilities for Greek taxpayers.