Government to unbundle EAC
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.