Govern­ment to un­bun­dle EAC

Financial Mirror (Cyprus) - - FRONT PAGE -

The govern­ment de­cided on Mon­day to go ahead and un­bun­dle the heav­ily union-con­trolled Elec­tric­ity Au­thor­ity of Cyprus (EAC) by split­ting it into two state-owned en­ti­ties, but re­tracted pre­vi­ous plans for its pri­vati­sa­tion.

The about-turn, un­der pres­sure be­cause of the May 22 par­lia­men­tary elec­tions, will see the EAC split into a power pro­ducer on the one hand and a grid owner and retail sup­plier on the other.

Iron­i­cally, the change of heart comes with the full bless­ing of the Troika of in­ter­na­tional lenders (IMF, ECB, Euro­pean Com­mis­sion), who ac­cepted the govern­ment’s re­quest to ex­clude the EAC from the list of pub­lic en­ti­ties and sta­te­owned as­sets that need to be pri­va­tised by 2018 and raise some 1.4 bln euros.

Over the past weeks, EAC trade unions, strongly rep­re­sented within all political par­ties, threat­ened strike ac­tion to de­feat the ad­min­is­tra­tion’s ef­forts to change the EAC’s sta­tus, with lat­est work­ers’ meet­ing on Mon­day forc­ing the clo­sure of all pub­lic ser­vice cen­tres un­til 12 noon.

Deputy govern­ment spokesman Vic­tor Pa­padopou­los said af­ter the Cab­i­net meet­ing on Mon­day that EAC em­ploy­ees will re­tain their priv­i­leges and rights un­der the new struc­ture.

He added that the EAC will also be able to take part in fu­ture en­ergy plans, in­clud­ing the de­vel­op­ment and di­rect pur­chase of nat­u­ral gas.

Pa­padopou­los said that the un­bundling de­ci­sion was in line with the EU’s Third En­ergy Pack­age, aim­ing to en­hance com­pe­ti­tion and this prac­tise was adopted in two out of three EU mem­ber states.

How­ever, con­tin­u­ing their crit­i­cism of En­ergy and Trade Min­is­ter Yior­gos Lakkotrypis, trade union of­fi­cials said that the own­er­ship un­bundling was not nec­es­sary and that the aim was to weaken EAC, while mis­lead­ing pub­lic opin­ion.

The em­ploy­ers fed­er­a­tion OEV crit­i­cised the unions’ ir­re­spon­si­ble be­hav­iour and strike threats, say­ing that this was hurt­ing the sac­ri­fices and ef­forts of the small and medium-sized en­ter­prises of the pri­vate sec­tor. It added that the govern­ment should speed up ef­forts to reg­u­late strikes in es­sen­tial ser­vices so that con­sumers and SMEs no longer suf­fer from the whims of trade unions that hold the is­land’s strug­gling econ­omy hostage.

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