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Greek snap elections have major implications for port privatisation projects

The snap elections announced by Prime Minister Alexis Tsipras for 30 June or 7 July, after his government’s sound defeat in the European Parliament elections, on 26 May, have major repercussions on various pending privatisation projects.

According to reports, a handful of decisions and pending actions related to all-important privatisations will be on hold by the Hellenic Republic Asset Development Fund (HRADF) until the national elections. Ideological differences in privatisation policy between ruling SYRIZA and main opposition New Democracy are well-documented, with the governing party initially opposed practically to all privatisations but nevertheless having promised to fulfill "prior actions" cited in three successive bailout agreements (memorandums) with Greece's creditors.

Among government’s successes are the landmark privatisations of the port authorities of Piraeus and Thessaloniki, as well as 14 regional airports around Greece.

But on the other hand there is still no construction at the southeast coastal Athens site of Helleniko, the biggest property development project in Greece, and a handful nullified tenders in the energy sector --PPC (DEH) lignite-fired power units, Hellenic Peroleum’s (Elpe) petrochemical group, the country's natural gas grid and the state-run natgas provider-- are considered its biggest failures to date.

Centre-right New Democracy has repeatedly and prominently stated that it backs more and accelerated privatisations in the recession battered country.

The initial market reaction after the European election results and the announcement of the expected elections was positive. Investors were "bullish" on May 27 at the Athens Stock Exchange (ATHEX), while the yield for the 10-year Greek bond also fell more than 30 basis points in one session, nearly reaching a historic low.

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At present, the transfer of another 10 regional ports to a "superfund" is pending, although the current Tsipras government is intent on holding international tenders for specific services at the ports (concessions), and not offering the management - along with a majority of the share capital - of the entire port authorities, as was the case in Piraeus and Thessaloniki.

The first two international tenders for service concessions are expected to be for the ports of Alexandroupolis and Kavala.

Official US interest continues to be exhibited for the port of Alexandroupolis, which lies in extreme northeast Greece, a few kilometers west of the Greek-Turkish land border on the Evros River. The specific area is considered as a burgeoning cross-road for land-based and off-shore natural gas facilities and pipelines.

The US consul general in Thessaloniki, Gregory W. Pfleger Jr., last week visited the port on the occasion of the arrival of a US-flagged vessel carrying military vehicles and containers with military materiel, destined for the multinational NATO exercise "Saber Guardian 2019".

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