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Cyprus

EAC unions threaten renewed action over privatisation

EAC unions are against privatisation

ELECTRICITY Authority (EAC) trade unions took the gloves off on Monday, serving notice that they will likely be resuming industrial action to fight plans afoot to privatise the state power company.
In a letter to the House commerce and energy committee, which back in July had brokered a halt to the EAC’s work-to-rule, four EAC-affiliated syndicates said the government’s actions in the meantime “absolve us of the commitment we undertook to suspend the measures”.
The unions said a series of meetings, the latest taking place on November 19, with Energy Minister Giorgos Lakkotrypis has convinced them the administration is bent on privatising the EAC regardless of any opposing arguments.
They accused the energy ministry of dovetailing on a “custom-made” government-commissioned study conducted by private consultants – unveiled in October – recommending the EAC’s breakup into separate entities over which the state would hold majority control.
The consultants found the best option is for the EAC to be first unbundled into its various activities – generation, supply, transmission and distribution. The generation and supply activities would then be transferred to a new company.
The unions say the study’s underlying assumptions are flimsy and far removed from the realities of the local energy market.
Ultimately, they argue, given the small size of the market in Cyprus, privatising the EAC would lead to higher rates for consumers.
Per the terms of Cyprus’ bailout, the EAC is one semi-state enterprise slated for denationalisation, with the proceeds going toward paying down the €10bn loan facility.
The Memorandum of Understanding of September 2014 states that the EAC will be privatised “by mid-2018”.
The relevant article states: “The privatisation plan identified by the government after consultation with the programme partners will raise at least €1 billion by the end of the programme period and an additional €400 million by 2018 at the latest, which will be used for public debt reduction.”
EAC unions charge the government of taking cover behind the demands of the island’s international creditors, known as the troika.
In reality, they claim, the government never forcefully negotiated with the troika on the matter.
In a November 27 statement, the four main unions alerted members that they would soon be summoned to gatherings “for a detailed briefing as well as on the actions that we shall be deploying”.

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