By Jennie Matthew
THE GENERAL Manager of the Cyprus Electricity Authority, Costas Ioannou, yesterday called for an “in-between model” for the EAC that instead of full privatisation of the sector.
In marked contrast to most speakers at this week’s British Council conference on privatisation and liberalisation, Ioannou spoke in favour of reform and efficiency — without privatisation.
“One school of thought is that electricity is so important it shouldn’t be left to private individuals. Privatisation is not required by the EU directives,” he said.
“The EAC was founded in 1952, after the failure of private companies. The two key words here are ‘privately owned companies’ and ‘failure’,” he said.
The Cyprus electricity sector must change from a semi-governmental monopoly to a partly liberalised industry by January 2003 – the initial target date for the country’s accession to the European Union.
The EAC will retain its control as generator, supplier, distributor and supplier of electricity in Cyprus, despite allowing other players access to 33 per cent of the market.
Provisional legislation should be passed by the end of the year, independent regulators will be appointed in March 2002, secondary legislation is timetabled for April 2002, and the ‘new’ EAC should operate for a six-month trial period from July 2002, ready for the accession target of January 1, 2003.
Ioannou said he was committed to meeting EU directives, but claimed good service and the small size of the Cyprus market were strong reasons for the EAC not to go private.
Electricity for domestic consumption in Cyprus is currently the third cheapest in Europe, but because of subsidisation prices will rise 20 per cent.
Ioannou said subsidisation was a parliamentary decision, not an EAC decision. He called for a more flexible relationship with the House and the Ministry of Industry and Commerce.
The EAC is on track to meet EU directives on the environment and the Kyoto protocol.
To conform to a draft directive that 22.1 per cent of electricity production must come from renewable energy sources (RES), the EAC has brought a solar-power installation, capable of producing 90 kilowatts.
He promised roof top units that would enable consumers to produce their own electricity, or sell it back to the network.
Ioannou also spoke of plans to take advantage of liberalisation in other sectors of the economy, such as telecommunications, desalination and consultancy.
“We’re going to be more productive, efficient and re-organise into business units irrespective of privatisation. Maybe there is an in-between model. The best thing is to go slowly and wait and decide on things as they come along.”
The chairman of the EAC board, George Georgiades, said that electricity generation and supply in the Greek Islands had not been privatised because the market was considered too small, although the Cyprus market is considered large enough to handle competition.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
