Italian railways bidding for Greek operator, rivals expected

12 April 2016
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Greece has so far received initial interest from Italy’s state railways for its railway operator TRAINOSE and expects three more suitors to bid for the asset, the head of the country’s privatization agency said in an interview on Tuesday.

Billed as a key part of Greece’s international bailouts since 2010, privatizations have reaped only 3 billion euros ($3.4 billion) so far, way below an initial target of 50 billion euros, due to political resistance and bureaucratic problems.

The leftist-led government of Alexis Tsipras came into power early last year promising to end six years of austerity and firesales of state assets.

It initially halted the sale of TRAINOSE along with other divestments but relaunched the process in January under a bailout agreed with eurozone lenders and the International Monetary Fund to rescue Greece from the threat of bankruptcy.

“Italian railways are interested, they have already submitted their interest officially and we are also expecting initial interest by Russian railways (RZD) and (Greece’s contractor) GEK-Terna, either in a joint venture or independently,” said the chairman of Hellenic Republic Asset Development Fund (HRADF) Stergios Pitsiorlas.

“We are also expecting China’s COSCO to express interest,” he told Reuters.

The deadline for initial bids for TRAINOSE is April 15 and potential investors will have to submit binding bids by May 31.

Pitsiorlas, 61, was appointed in March last year. Under his management, HRADF concluded a 1.2 billion euro airport lease deal with Germany’s Fraport and the sale of a 67 percent stake in Greece’s biggest port Piraeus to shipping giant China COSCO Shipping.

Pitsiorlas said Athens was now seeking lenders’ approval to delay achieving an initial 6.4 billion euro asset sales target by a year to 2018 after failing to achieve the 1.4 billion euros penciled in for last year.

“We are aiming at 6.4 billion euros by 2018. This means that the program we are implementing has to be expanded,” he said. “We expect this to be confirmed by the bailout review.”

Greek railway maintenance company ROSCO is also up for sale and Pitsiorlas said that two of three bidders short-listed in 2013, France’s Alstom and Germany’s Siemens, remained in the race.

Bids for another big ticket, the sale of a majority stake in the country’s second biggest harbor, Thessaloniki Port, will be delayed to the end of July from late April.

“We will announce the timetable once we have the draft concession plan approved,” he said. “We will make sure there will be significant investments in Thessaloniki.”

Denmark’s container terminal operator APM Terminals, Philippines-based International Container Terminal Services ICTS and Dubai-based P&O Steam Navigation Company (DP World) were strongly interested in the Thessaloniki port, Pitsiorlas said.

Under last summer’s bailout agreement, Athens had committed to conclude 11 state asset sales to help raise 6.4 billion euros in 2015-17, including the sale of a stake in telecoms operator OTE and the lease of a major motorway.

Greece and its international lenders adjourned talks on the bailout review early on Tuesday and will resume them immediately after this week’s IMF spring meeting, the Greek finance minister said.

Pitsiorlas said privatization proceeds will exceed 2 billion euros this year, mainly from the lease of 14 provincial airports to Fraport, the sale of Piraeus Port and a seaside tourist property near Athens.

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