The Council of State recently ruled that the conversion of public water company EYDAP into a private entity conflicts with Constitutional provisions regarding the State’s duty to ensure public health, which essentially cancels the coalition government’s privatization plans for the water companies.
The ruling specifically notes that the conversion of the water company into a private entity whose primary goal will be to generate profit means that there will be uncertainty regarding the provision of affordable public utilities and quality services. As such, privatization fund TAIPED will likely be forced to return the controlling shares of the water companies back to thee State.
At present TAIPED owns 74.017% of the public water company of Thessaloniki (EYATH) and until recently it also owned 61.33% of the water company in Attica. The privatization company recently announced that it cancelled the transfer of 34% of EYDAP shares, reducing its shares to 27.3%. TAIPED will also probably have to return about 50% of EYATH shares to the State.
TAIPED’s initial plans were to sell off the water companies in 2015 and had even made plans with foreign and domestic investors. However the public’s fierce opposition to the possibility of such a sale, which resulted in an informal referendum being carried outside polling stations of Thessaloniki during the recent elections, may have influenced the State Council’s ruling.
With the State Council ruling essentially canceling TAIPED’s privatization plans, the government is attempting to find a solution and is examining the possibility of transferring management to private investors, under public control. Nevertheless, there is skepticism whether investors will be interested in acquiring a maximum 24% of the companies that provide limited intervention options.
