Greece's problem-plagued privatisation programme, which is key to the country's economic recovery and meeting its bailout targets, has received yet another blow with the failure of the planned sale of a state-owned natural gas supplier.
Officials were stunned when the Russian energy giant Gazprom failed to bid for Depa, described as one of the jewels in the crown of a privatisation process that is due to raise €2.6bn this year. "We had absolutely no inkling that this would happen," said one insider with close links to Taiped, Greece's privatization fund. "Alexey Miller [Gazprom's CEO] himself was overseeing negotiations. It's a complete bolt out of the blue."
The failure to secure binding bids for Depa before Monday's deadline marks a potentially huge setback for a country that has been forced to repeatedly scale back its privatisation programme because of a lack of headway.
A selloff of state assets is one of the conditions attached to a €240bn bailout programme drawn up by the troika of the International Monetary Fund, the European Central Bank and the European Union. From its initial aim to raise €50bn euro by 2019, Athens now says it wants to raise €11.1bn by 2016 and €25bn by 2020. A goal of €2.6bn had been set for 2013 but the lack of bids for Depa signals that even that modest target might be unachievable.
Gazprom's Miller, a close friend of the Russian president, Vladmir Putin, had flown to Athens to conduct talks with the Greek prime minister, Antonis Samaras. Keen to secure a deal with the only international energy company that had shown any interest in Depa, the coalition government had extended the bid deadline and modified some of the terms – starting with lowering the amount the buyer would have to deposit as a guarantee – to facilitate the Russian takeover.
Gazprom was said last month to have made a preliminary bid of €900m for the company. The Greek joint venture M&M, the Russian giant's only rival, had reportedly offered €550m.
There was speculation on Monday that Moscow's decision to pull out had been dictated by geopolitical pressure. The United States and the EU have both made clear their distaste for Russia further increasing its influence over the European energy market. Brussels has openly grumbled about Moscow's business practices.
"I think the message the Russians got, especially from the European commission, was that the deal was not going to be approved," said Thanos Dokos who heads Greece's leading thinktank Eliamep. "In those circumstances they felt, 'why bother?'".
There also fears that failure to sell Depa could stymie the planned disposal of the state oil refiner, Hellenic Petroleum, which owns 35% of the natural gas company.
Privatisations of ailing state companies are seen as crucial to revitalising an economy whose debt load is projected to hit 185% of GDP by the end of the year, despite two troika bailouts, and to lowering an unemployment rate that is now the highest in the eurozone at 27%.
Aides to all three party leaders in the ruling alliance expressed shock that Depa, a profitable company, should fail to attract more bids. "The message it sends to potential investors is terrible," one insider conceded.
But Dokos said disappointment over the abortive bid could be offset if the transadriatic pipeline (TAP) crossing Greece, Albania and Italy was selected as the route to transport natural gas from Azerbaijan. "If TAP is selected it will be a major boost for Greece's economy and regional role," he said. "We will just have to wait until the end of the month when a decision is due to be made."
