Concerns over great asset sale

It’s been billed as the sale of the century — the sales of state assets from Ireland, Greece and Portugal, the three countries being bailed out by the EU and IMF to raise up to €58 billion in total to pay off creditors.

But even at knock-down prices, sales are proving difficult in Greece, while in Portugal questions are being raised about some of the purchasers.

Portugal has been powering ahead and has just announced that it has sold off about 60% of the €5.5bn of the family silver it promised to let go as part of its €78bn bailout. But Greek plans to sell off €50bn worth of their valuables have stalled and, given that the value of property has dropped by two-thirds, they have revised the target downwards to €19bn for now.

Transport, including the airline TAP; energy, including the electricity company; a water company; the postal service; and the state-owned insurance company, as well as some smaller firms are earmarked for disposal in Portugal.

Yesterday, Finance Minister Vitor Gaspar signed for the sale of 40% of the grid company, REN, with 25% going to the China State Grid and 15% to Oman Oil, for €592m.

The state-owned China State Grid is the world’s largest utility company and the deal brought with it a €1bn loan from the China Development Bank to boost REN’s financial capacity, REN’s chief executive Rui Cartazo said. China State Grid are cash-rich, running power transmission and distribution networks in 26 of China’s 31 provinces and expect to make a profit of €7.4bn this year and to invest €295bn over the next five years in China’s power grids.

In December, Portugal agreed the sale of a 21% stake in EDP to the Chinese Three Gorges group for €2.7bn.

Three Gorges is the world’s biggest hydroelectric dam in China, which was acknowledged as an environmental disaster when it began to operate some years ago.

Greece, despite many stories of Arab and Chinese buyers lining up to buy ports and islands, has so far divested itself of just €1.8bn worth of its state assets from the 21 goodies on the list. The EU/IMF initially asked that €50bn worth be sold off, but this has been cut to a more realistic €19bn.

The list includes restructuring or closing down loss-making rail lines and selling 49% of the railway operator OSE.

Selling part of the postal service, water and sewage utilities in Athens and Thessaloniki; all casinos including the lottery; stakes in airports, ports, real estate; open up to private enterprise the building of infrastructure including roads and freight centres; issuing new licenses for the gaming and internet betting industry.

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