By Peter Stevenson
AN EMERGENCY action plan is needed to deal with the Electricity Authority of Cyprus’ (EAC) declining revenues, Energy Regulatory Authority (CERA) chief George Shammas said yesterday while calling on unions to leave their old-school thinking in the past.
Shammas said demand for electricity was down 20 per cent, the biggest drop in consumption seen in 35 years.
“Declining sales need to be dealt with by creating an emergency action plan,” he said.
“Solving the EAC’s financial difficulties by passing the cost onto the consumer is not a long-term or sustainable solution.”
Cyprus has the highest electricity prices in Europe, having risen over 20 per cent between the second half of 2011 and the second half of 2012.
Shammas’ comments came during the annual general meeting of EAC scientific personnel union SEPAIK, and a day after auditor-general Chrystalla Georghadji said it was doubtful the EAC could even be considered a going concern any more. The EAC, and other semi-government organisations have been earmarked by international lenders for privatisation.
But Georghadji blasted, among other issues, its cash flow problems, overdue electricity bills and fat employee allowances, and has asked the board to submit a credible plan to tackle the problems. Georghadji said “no substantive measures had been put in place to restructure/rationalise the organisation while a new voluntary retirement scheme, provided “especially high” compensation that would provoke the public’s sense of justice. Neither has the EAC yet cut any of the numerous allowances afforded to staff as was the case in the central government.
Shammas yesterday told union representatives the delay in taking measures and leaving the EAC open to external factors would not lead to the desired solutions.
“You must leave behind any reactions which go against the modernisation and the improvement that all public sector organisations like the EAC require,” he said.
“You all know the problems and you are in a better position than any external players to suggest solutions, otherwise the way things are going, very soon, painful solutions from others who do not take into account all factors and characteristics of the area you know very well, will be implemented,” he added.
EAC chairman Charalambos Tsouris, who also addressed the union members was blasé about Georghadji comments. “We are used to the auditor-general only presenting the possible negative aspects that she sees,” he said.
Commenting on the state of the EAC, Tsouris added: “Unfortunately the government still owes the EAC €25 million for the rental of generators following the naval base blast and the amount has not even been included in the 2013 budget, which fills us with concern.”
The EAC chairman said that unpaid electricity bills now totalled €50 million. “The media often exaggerates the amount of houses which have had their electricity cut off unfortunately,” he said. Tsouris said that of the 550,000 EAC customers, electricity has been cut-off from around 1,600 who were unable to pay their bills, even with payment flexibility offered to them by the authority.
SEPAIK’s Sotos Savva, addressing the AGM, also commented on Georghadji’s criticism saying that “every Cypriot should be extremely worried at the prospect of a private electricity-supplying monopoly. “We do not believe that privatisation is the answer,” Savva said, but rather streamlining the existing structure of the EAC.
Savva said that under the current circumstances SEPAIK understood that as demand decreases, work decreases and so the workforce would also have to be reduced somehow.
“Trade unions have publicly stated that we accept and respect CERA’s decision for the gradual reduction by ten per cent of employees and we are currently speaking with the board about how to smoothly achieve that,” he said.
Savva said the employees – there is talk of a reduction of 350 – have been offered a scheme for early, voluntary retirement but are currently studying another plan.
Despite the troika’s determination to see the island’s SGOs privatised, the government has on a number of occasions promised semi-government employees that their jobs, and or, benefits would be protected.
Labour Minister Zeta Emilianidou yesterday repeated the promise to the EAC union, saying no employee of any semi-government organisation would be victimised by any restructuring.
“I can assure you that workers’ rights are at the top of our priorities as we strive not to victimise any employees,” she said.
Emilianidou said she believed that EAC employees could play a vital role in the important field of energy which would help in the recovery and long-term development of the economy, by providing more jobs.
Political parties also weighed in yesterday in the wake of Georghadji’s report.
EDEK leader Yiannakis Omirou said any discussion about the future of SGOs should not involve slogans, political dogmatism or inflexible attitudes.
“Despite the government’s pre-election promises they are going ahead with privatising profitable SGOs,” he said. At the same time he said his party was against all forms of inflated bonuses whether in the private or public sector.
“The mistakes of Cyprus Airways and Eurocypria must become a lesson to other organisations and companies to not reach the same state,” he said.
The Green Party also criticised the situation at SGOs labelling it unacceptable that certain people were mishandling public wealth and property.
“We do not support the opinion that SGOs should be dismantled, like Cyprus Airways, or for them to be completely privatised but unfortunately the heads of those organisations have made them unsustainable as they are,” a statement from the party said.