Dim outlook after years of Greek austerity
KOSTAS Argyros’s unpaid electricity bills are piling up, among a mountain of debt owed to Greece’s biggest power utility.
His family owe à850 (about R12 500) to the Public Power Corporation, a tiny fraction of the statecontrolled firm’s à2.6-billion in unpaid bills.
Argyros picks up only occasional work as an odd-job man.
“When you only work once a week, what will you pay first?” asked the 35-year-old, who lives in a tiny apartment in an Athens suburb with his unemployed wife and four children.
The Argyros family are emblematic of deepening poverty in Greece following seven years of austerity demanded by the country’s international creditors.
They burn wood to heat their home in winter, food is cooked on a small gas stove, and hot water is scarce.
The only evening light is the blue glare of a TV screen, for fear of racking up more debt. Five-watt lightbulbs provide a dim glow, and Argyros worries about the effect on their eyesight.
More than 40% of Greeks are behind on their utility bills, higher than anywhere else in Europe.
People in poor neighbourhoods are also increasingly turning to energy fraud, meaning the problem for the corporation is much higher than the mountain of unpaid bills suggests. Power theft was costing it à500-million to à600-million a year in lost income, an industry official said.
Public disclosures by the Hellenic Electricity Distribution Network Operator, which checks meters, show that verified cases of theft climbed to 10 600 last year, up from 8 880 in 2013 and 4 470 in 2012.
Authorities believed theft was far higher than the cases verified by Hedno, another official said.
Households in the country are equipped with analogue meters, which are easy to hack. One of the most common tricks is using magnets, which slow down the rotating coils to show less consumption than the real amount.
Some websites even offer consumers tips on power fraud.
For households that have had their electricity cut off, a group of activists calling themselves the I Won’t Pay movement have taken it upon themselves to reconnect the supply. The group says it has done hundreds this year.
The PPC, which has a 90% share of the retail market and 60% of the wholesale market, is supposed to reduce this dominance to less than 50% by 2020 under Greece’s third, à86-billion bail-out deal.
The lenders also want the corporation to sell some of its assets, but the company is toiling under the debt of unpaid bills, a problem opposition lawmakers say will force a fire sale.
In little over a year from June 2015, overdue bills to the 51% state-owned firm grew by nearly à1-billion to à2.6-billion, CEO Manolis Panagiotakis told lawmakers last month.
Analysts estimate that the corporation’s cash reserves have shrunk to about à300-million, causing it to secure a à200-million bank loan to repay a bond due next month.
The tangle has left it with little leeway for new investments or to fund a switch to cleaner forms of energy from coal.
In the apartment building where the Argyros family live, many tenants struggle even to pay the à25 annual fee to light communal areas such as staircases.
The power utility has tried to recoup unpaid bills with phased repayment schemes. A total of 625 000 customers owing a total of à1.3-billion had signed up to the scheme by January.
The Argyros family have also entered the scheme with the help of Theofilos, a local charity, which also contributes towards their monthly bills.
Meanwhile, the utility’s provisions for bad debt remain high. The schemes drove the figure down to à453-million in the nine months to September last year from à690-million a year earlier. Analysts expect the corporation to have swung back to a profit of between à63-million and à109-million in 2016, with provisions of below à600-million.
“It’s reasonable to say that the PPC is too big to allow it to collapse,” said energy expert Constantinos Filis. “On the other hand, a few years ago some argued that no country could fail either.” —
More than 40% of Greeks are behind on their utility bills