first_imgBy Elias HazouThe best option for the Electricity Authority of Cyprus (EAC) is for it to be broken up into separate entities over which the state would hold majority control, a government-commissioned study has found.Exergia SA, energy and environment consultants, have been tasked by the government to analyse various options for the future structure and ownership of the semi-state power company.An executive summary of their interim report was presented to MPs on Tuesday.Per the terms of Cyprus’ bailout, EAC is one semi-state enterprise slated for privatisation, with the proceeds going toward paying down the €10bn loan facility. But pushback from unions and threats of industrial action have forced the government to tread lightly.Having analysed 12 scenarios in total, Exergia found that the preferred option is for the EAC to be first unbundled into its various activities – generation, supply, transmission and distribution.The generation and supply activities of the EAC would be transferred to a new company, which Energia tentatively names “GS Co.”That would be followed by the creation of the “EAC Single Network Co” with three business units – distribution assets owner and operator, transmission assets owner and operator, and market operator and transfer of transmission and distribution assets to the new company.According to Exergia, the overall preferred option for ownership “is for the state to retain majority control in both the GS Co and the EAC Single Networks Co and divest minority shares and management to the private sector.”On this model, the consultants add that “from the aspect of privatisation it offers to the GoC [government of Cyprus] maximum flexibility to design, organise and proceed with privatisations in the electricity sector.”Exergia go on to note that this scenario “has the clear preference of the European Commission…”The European Commission is part of the ‘troika’ of Cyprus’ international lenders.In their closing remark, Energia state that “privatising generation should probably wait until the wholesale market has been established and the terms under which [natural] gas shall be sold to competitors have been clarified.“EAC restructuring to separate generation/supply from the networks activities should take place as early as possible.”Essentially the scenario advocates the partial privatisation of the EAC. Another scenario, which scored lower on Exergia’s scale, involves the creation of EAC subsidiaries.Energy and commerce minister Giorgos Lakkotrypis said the interim report would be forwarded to the troika on Thursday, while the cabinet is to be officially briefed next week.Exergia’s final report would be ready by end-November, he added, stressing that no decision on the EAC’s future has yet been taken.For his part, Andreas Poullikas, head of the Cyprus Energy Regulatory Authority, said it would take three to four years to unbundle the EAC’s various activities.Andreas Panorkos, head of the EPOPAI trade union, alleged that a member of the team compiling the Exergia report may have a conflict of interest.He said the individual – whom he did not name – was a former government official, who after resigning his post was tied to a company which is bidding for the natural gas supply tender.Lakkotrypis challenged Panorkos to back up the claim with evidence.It’s understood that EAC union reps have requested a meeting with the energy minister for Friday.The unions argue that, given the small size of the market in Cyprus, privatising the EAC will ultimately lead to higher rates for consumers.In a statement, main opposition AKEL said a reading of the report reveals the consultants worked backwards – making their findings fit the theory, namely the government’s predetermined decision to denationalise the EAC.You May LikePopularEverythingColorado Mom Adopted Two Children, Months Later She Learned Who They Really ArePopularEverythingUndoLivestlyChip And Joanna’s $18M Mansion Is Perfect, But It’s The Backyard Everyone Is Talking AboutLivestlyUndoModernizeIf Your Home Has Old Roofing, Read ThisModernizeUndo Pensioner dies after crash on Paphos-Polis roadUndoCypriot tycoon launches ‘Bank of Cannabis’UndoThree arrested in connection with hotel theftsUndoby Taboolaby Taboolalast_img

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