(MENAFN- Gulf Times) Greece gave approval for the first privatisation under Prime Minister Alexis Tsipras, a key requirement of the country's bailout deal with creditors.
A government council overseeing state asset sales has signed off on a 40-year concession for German airport operator Fraport and a unit of Greece's Copelouzos Group to operate 14 regional airports for ‚¬1.2bn ($1.32bn), according to the government's official gazette.
The move is the first in a series of privatisations that Tsipras agreed to undertake in return for a third bailout package worth as much as ‚¬86bn. Most imminent is obtaining funding to avoid a default on August 20 when Greece must pay ‚¬3.2bn to the European Central Bank.
Under the current proposal, Fraport would invest ‚¬1.4bn to upgrade the airports by the end of the concession. The German company would also pay an annual guaranteed leasing fee of ‚¬22.9mn for the airports that include the holiday islands of Mykonos and Santorini. "The Greek government's decision is not tantamount to the conclusion of a contract but rather offers a basis for the resumption of negotiations," Joerg Machacek, a Fraport spokesman, said by phone. "We are building up from where we left off."
While opposed to asset sales when elected in January, Tsipras reversed his pre-election promise in order to seal a bailout deal in July. The shift has split the ruling Syriza party with the prospect of new elections as early as September. Tsipras is planning a confidence vote after 44 of his lawmakers voted against him when the bailout deal was approved last week.
Under the latest agreement, the third since 2010, Greece will establish a ‚¬50bn investment fund to use as a revenue source over 30 years. The fund will include state property, shares of public companies and infrastructure, Greek officials said this month.
Following the deal, Greece set deadlines for binding offers to buy stakes in Piraeus Port Authority, rail services operator Trainose, train maintenance company Rosco SA and Thessaloniki Port Authority. APM Terminals, a unit of AP Moeller-Maersk, and Cosco Pacific, which already operates a pier at Piraeus, are among the groups that have qualified to buy a stake in PPA. Bidders for Trainose and Thessaloniki include OAO Russian Railways.
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