Cyprus Mail
Cyprus

EAC unions want House to stop privatisation

By George Psyllides

WORKERS at the Electricity Authority (EAC) want parliament to debate the issue of privatisations as a matter of urgency, claiming the government’s intentions to sell state assets and organisations are unconstitutional.

In a letter to parliament, the unions also raised national security issues as they claimed that the aim was to dissolve a public utility without taking into consideration the country’s interests.

The unions said the privatisation roadmap, that was presented to the Troika of international lenders as part of the Cyprus bailout plan, had been drafted in their absence and without any dialogue.

“It was not done with transparency at any stage and any opposing views or party positions were not allowed to be heard,” the unions said.

The government presented the privatisation roadmap in December last year, irking workers at the three main state organisations, EAC, state telecoms CyTA, and the ports authority.

According to the bailout package, Cyprus must raise €1.4bn through privatisations between 2016 and 2018.

EAC unions said there was great secrecy in drafting the necessary legislation, which will break the organisation into four separate entities.

The bill did not take into consideration the constitution, security of supply, security of the system and the state, the good of the economy, and the price of electricity, the unions said.

“Why was there no serious effort to find an alternative solution?” they added, suggesting that the international lenders’ insistence on privatisations at a time when the state was in dire economic condition would lead to a fire-sale “at humiliating prices with national and social risks.”

The unions reiterated that they had a legal ruling saying privatisation of the EAC was unconstitutional.

Based on the roadmap, the first organisation slated for privatisation is CyTA.

The president’s advisory National Economy Council said in November that it considered the EAC a more complex case than the others.

The EAC itself is in a difficult position, the NEC paper said, in that a sizeable part of its production capacity is inactive given the reduced demand due to the financial crisis.

It remained trapped in costly diesel to generate electricity compared to the production costs by solar panels that are below the EAC production costs.

“A transition to a new ownership regime would be more difficult and traumatic for the EAC than for CyTA,” the NEC said, adding that privatisation of the EAC should be accompanied by a strong regulatory authority that would supervise the private firm.

As far the Ports Authority was concerned, the NEC recommended it assumed a regulatory role over ports, whereas the administration of the ports should be transferred to the private sector.

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