Cyprus Mail

EAC’s war of words over sell-off

EAC bosses yesterday launched an attack on the privatisation of semi-government organisations (SGOs) throwing in a little scaremongering by warning that if the electricity authority fell into private hands, half of the island would be without power.

Speaking at a news conference to announce that it would temporarily reinstate power for Christmas to the 700 households whose supply has been cut due to non payment, EAC chairman Charalambos Tsouris also accused the government of ignoring concerns about the semi-state sell-off.

Tsouris said if it was simply an issue of raising capital, there were alternative ways to obtain the €1.4 billion set by the troika of international lenders as the amount to be raised through privatisations.

Tsouris argued that “tremendous price hikes, extremely poor customer service and constant network failures” were to be expected, should the organisation be privatised. “On the day the organisation goes private half of Cyprus will be left without power,” he said.

Asked whether his organisation had submitted proposals on how to raise the required €1.4 billion to the finance minister, the EAC head replied that although a meeting with the minister was requested in writing three times, it never happened because the minister “either refused, or ignored us, or just didn’t have the time to meet with us for discussion.”

This comment sparked a response from Finance Minister Harris Georgiades. “Some members of the outgoing boards (of public companies) hold a dogmatically opposite view. This is respected but the decisions have been taken,” said Georgiades. The minister said he had in fact seen the vice chairman of the EAC board on Tuesday. But Tsouris accused the minister of being disingenuous, saying the meeting in question was related to the EAC’s pension fund and had nothing to do with the issue of privatisation. They discussed renewal of €100 million state bond held by the fund, he said.

Tsouris’ earlier comments were backed up by EAC director general Stelios Stylianou in a Christmas address to staff. He said the privatisation of public power companies in other countries had resulted in tremendous increases in the price of electricity, very poor customer service and continuous damage to the network.

“The experiment of privatisation has been tested in many countries, has failed and now they are returning to nationalisation,” he said.

He also said it was “inappropriate” to depend on privatisation to achieve the modernisation of the authority. “Our position is based on sound techno-economic data that privatisation of the EAC will lead, ultimately, to an increase the price of electricity and not reduction,” said Stylianou.

“It is universally accepted that the issue has created a strong sense of concern and insecurity, among EAC staff and among the public in general, mainly due to the fact that decisions have been initiated without any consultations with the board and the unions.

Stylianou said that the electricity market in Cyprus had been liberalised since 2004, amd that although licences have been given to private companies to produce electricity and compete with the EAC, none of them chose to go ahead.

“I believe that if the private sector had been able to offer electricity at prices lower than those of EAC, it would have done so by now,” he said.

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