Focus to solve Greek power giant’s financial troubles should be on overdue bills: experts

The Greek government has drafted a blueprint to save the loss-making state-controlled Public Power Corporation (PPC), while experts urged that the focus should be on the collection of overdue bills.

The government plan, explained in the Greek Parliament by Energy Minister Kostis Hatzidakis on Monday, includes the sale of assets such as a minority stake in grid operator DEDDIE – a PPC subsidiary – and measures to reduce the pile of unpaid electricity bills.

PPC’s losses last year reached over 900 million euros (1.01 billion U.S. dollars), according to its latest financial reports.

Hatzidakis stated that the blueprint for PPC’s streamlining will contain an adjustment in electricity rates, the abolition of the system of power auctions to alternative suppliers, and a voluntary redundancy program for PPC staff. The plan will be applied by the new management of the utility to be appointed by the end of the week, Hatzidakis said.

Former PPC chief Themis Xanthopoulos told Xinhua that while the problems are serious, the electricity utility is “simply too big to fail”. It still accounts for over 80 percent of the local power market, according to end-December data.

Experts told Xinhua the main source of PPC’s financial troubles is the failure by hundreds of thousands of its clients to pay their bills.

PPC reported last month that the sum of the all-time unpaid bills have come up to some 2.7 billion euros, and despite efforts to sell off some of that to funds and to force strategic dodgers to pay up, the pile of overdue debts to the utility keeps growing, its quarterly figures showed.

Hatzidakis said the primary target will be what he called “the big fish”, which is some 60,000 customers who owe about 800 million euros between them.

Antonis Zairis, assistant professor of finance at Neapolis Pafos University, told Xinhua that some 20 to 30 percent of the overdue payments may be collectable, but it would take specially qualified staff to do this.

“That would require a systematic procedure that would exhaust all debt collection options, up to the threat of taking debtors to court,” said Zairis, adding that the negotiation with the strategic dodgers is crucial, with the moral commitment made for paying often proving very efficient.

Hatzidakis said the ongoing process for the securitization of some of the unpaid bills will continue, selling them in packages to investors, as this will be a vital source of cash for the corporation. (1 euro = 1.12 U.S. dollars)