By Elias Hazou
The government on Monday decided on the legal unbundling of the state power company as trade unions vowed to fight to the bitter end to thwart what they see as the first step toward the privatisation of the EAC.
Speaking to reporters after a meeting of the cabinet, which took the decision after a briefing by the energy minister, alternate government spokesman Victoras Papadopoulos said the EAC is to be split into two entities.
Two organisations would be created, both governed by public law: one for power generation and one for the electricity distribution network.
This, noted Papadopoulos, was a requirement under the EU’s third energy package. Aimed at boosting competition in the energy market, to the benefit of consumers, this unbundling has been carried out by two-thirds of EY member states.
In addition, a cabinet decree – dated March 28, 2014 – is to be amended, so that the EAC is exempted from a list of entities subject to privatisation.
The decision would moreover allow the EAC to participate in the natural gas energy plans, as the state power company will no longer hold a monopoly.
And workers at EAC would fully retain their employment status.
On energy minister Giorgos Lakkotrypis, whom the trade unions accuse of misleading them and the public about the government’s plans, the spokesman said that Lakkotrypis “faithfully followed the instructions of the president following the December 7 meeting and cooperated closely with the EAC board during the negotiations with the troika, which led to this positive outcome.”
Asked to comment on the reaction of the syndicates – which on Monday closed down EAC customer service outlets – Papadopoulos said:
“The first thing which the cabinet decided today is to exempt the EAC from privatisation. Therefore, those who today are inconveniencing consumers are doing so without good cause.”
A government “decision in principle” on the preferred form of unbundling of the EAC is a prior action for the release of the ninth and final tranche of financial assistance by Cyprus’ international lenders.
Asked whether the cabinet decision now paves the way for the disbursement of the tranche, and whether Cyprus can make it in time for the next Eurogroup meeting, Papadopoulos said:
“The faster the better for the Cypriot economy, and to us this is extremely important, and as the finance minister has repeatedly stated, we need to fulfil the memorandum of understanding and to exit it successfully.”
Despite assurances that their future is secure, EAC workers slammed the unbundling decision, which they described as a backdoor to eventual privatisation.
While the cabinet was in session, EAC workers from across the island gathered at the organisation’s headquarters in Nicosia.
EDEK party leader Marinos Sizopoulos was there, in a show of support to the workers.
Andreas Panorkos, head of the EPOPAI union, accused the energy minister of deliberately misinforming the public.
“The minister is misleading when he boasts that he has left the EAC out of the chapter of privatisation. Nothing could be farther from the truth.”
According to minutes of meetings that have been leaked, Panorkos said, the troika never backed down on demanding the EAC’s privatisation.
“On the contrary, it appears that unbundling is the first step toward privatisation,” he noted.
The trade union boss claimed also that a government-commissioned study – which the troika encouraged – states that in order for competitors to enter the electricity market, the average weighted cost of the EAC needed to rise.
“Otherwise said, the price of electricity would need to go up,” he said.
Also addressing the assembled workers, Demetris Constantinou, head of the SIDIKEK union, served notice that they would exhaust all means to stop privatisation.
“This shall not pass, we have many weapons at our disposal. They [the government] do not realise who they are dealing with, they do not understand that we are as one fist, and this fist will backfire on them,” he said.
“Even if they take a final decision, for us it is not the end of the road,” he added.
As expected, the government decision drew support only from ruling DISY. Party spokesman Prodromos Prodromou said the decision is geared at modernising the EAC.
“It is our view that at this time all parties concerned should rise to the occasion, avoid exploiting the situation, because the last thing Cyprus needs today, whether it concerns semi-governmental organisations or banks, are strikes and confrontations.”
Main opposition AKEL took the opposite stance, siding with the unions.
In a statement, Stefanos Stefanou said that according to a study compiled by foreign consultants, “in order for the EAC to fetch a good price when it is sold to private interests, first they must raise the price of electricity.”
Prior to the elections, he added, the ruling party and the president had pledged to fight against privatisation.
“Now, they are selling off public wealth. Their credibility is nil, and citizens no longer trust them.”
The Employers and Industrialists Federation (OEV) meanwhile urged EAC to refrain from strike action.
In a statement, OEV said that possible power cuts, as a result of industrial unrest, is the last thing the economy needs just as it is beginning to come out of three years of deep recession.
“Tens of thousands of employees, all from the private sector, have become jobless, and thousands of businesses have either collapsed or are barely hanging on.
“From those who were minimally affected by this disaster, we only ask that they respect this lopsided struggle to stay afloat. Especially from those who enjoy generous benefits…we demand uninterruptible provisions of goods and services. It would be inconceivable for power to be cut off even for one minute.”
The syndicates’ threat of power cuts were “an insult” to the sacrifices made by the private sector, OEV added, reiterating its proposal for new legislation regulating strikes in essential services.
