Cyprus Mail
Cyprus Energy

EAC to stay in state hands

By Andria Kades

A BILL allowing the Electricity Authority of Cyprus (EAC) to remain in state hands will head to the Cabinet on Monday after the island’s international lenders gave their nod of approval, preventing yet another series of strikes scheduled for next week.

Following furtive meetings between the energy ministry and the troika, as well as the EAC board of directors, a government source told the Cyprus News Agency that a final proposal had been sent to the troika on Thursday and by Friday the lenders vouched their agreement.

The proposal outlines the EAC will be legally unbundled into two companies, one responsible for distribution and transmission, while the other will be responsible for production and supply.

According to the same source, the troika agreed to the withdrawal of the EAC’s privatisation decree and the inclusion of government reservations relating to uncertain factors such as a potential solution to the Cyprus problem, natural gas developments and the EuroAsia Interconnector project, designed to connect the grids of Israel, Cyprus, and mainland Europe via a subsea cable.

In regards to the timeline, once the decision is taken, Energy minister George Lakkotrypis will submit an ‘implementation plan’.

This too, according to the source, will be ready in the very near future.

Any bills will need to be submitted to parliament at the end of the year and the decision must be implemented in two years time – by the end of 2017.

The about turn of the lenders – who only two weeks ago flat out rejected the notion of the EAC remaining in state hands – had unions announce a snap press conference expected to take place on Saturday.

No official statements have emerged from the government as to what caused the 180 degree turn by the lenders, however, following Monday’s Cabinet session more announcements are expected to follow.

Unions will also be holding a general meeting at the EAC’s Strovolos offices on Monday, bringing employees from across the island. As a result, the customer service will be closed to the public.

An announcement by the EAC apologised for any inconveniences and sought to clarify supply would not be affected.

As the power supplier said it was unsure what time employees would return to their work, customer service would be unavailable for the whole day.

The memorandum of understanding with the international lenders calls for the “efficient and effective” splitting up of the state power company.

It is a ‘prior action’ for the release of the next tranche of Cyprus’ bailout programme and was initially regarded as one of a handful of privatisations that, too, have not materialised, including the telecom company CyTA, the Ports Authority and divestments from other assets.

The aim was to help the government raise some €1.4bn from privatisations and reduction of the workforce from the state payroll.

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