The Greek energy minister admitted that Chinese state investors are now in control of the national electricity transmission system operator (TSO), supporting public concerns that they plan to enhance their influence throughout Greece by investing in infrastructure projects, much to the disappointment of EU partners and the US.
This could explain why the Tsipras administration has had a change of heart in the past year and wants to build an electricity cable to Crete on its own, awarding the contract directly to Chinese companies and abandoning a Cypriot venture that has been underway since 2012 with the blessing of the European Commission.
This about-turn has raised eyebrows in Brussels, with Commission sources pointing to this week’s summit, where apart from Brexit, the other main issue of concern was China’s growing influence, especially in economically vulnerable countries.
Last week, Brussels branded Beijing as a “systemic rival” and the German and French leaders are now pressing to introduce a law that would restrict access to Chinese companies bidding for the EU’s 2.4 trillion euros a year public procurement market.
The argument is that Beijing is not forthcoming with European companies bidding for public contracts in China and that this protection should be reciprocal.
In the case of Greece, the giant China State Grid Corp. swooped in and grabbed a 24% stake in electrical grid operator ADMIE providing some 200 mln euros in desperately-needed credit and offering to support a 2 bln development plan over 10 years.
In 2016, China’s biggest shipping company COSCO Shipping bought a 51% stake and currently controls the port of Piraeus, while Greek infrastructure group Copelouzos struck a deal in 2017 with China’s top coal miner Shenhua Group that acquired a 75% stake in four wind parks, according to Reuters.
Constructing the Crete-Attica interconnector cable as a “national” project would cost Greek consumers about EUR 450 mln more than if the link is completed as part of the Euroasia Interconnector, a EUR 3.5 bln system hooking up the Israeli grid with continental Europe via Cyprus, Kathimerini reported.
The newspaper added that the technical issue of ‘interoperability’ was the only worry, as the Chinese-built system would be inferior to the rest of the cable and could jeopardise the safety of the entire system, with Greeks recalling the power outages they have had at several outdated power stations in the past two years.
Crete is in urgent need of an electricity interconnection as it must decommission the high-emission diesel-powered plants on the island, which Euroasia says it can deliver ahead of any other provider and at a lower cost.
Energy and Environment Minister Giorgos Stathakis made the admission of Chinese control during a parliamentary debate on March 7 to pass an urgent bill that would allow ADMIE to hire about 80 new staff, with some 30 more headed for the ‘national’ interconnector project, which all opposition parties said smelled of party favouritism ahead of local and EU elections in May.
“ADMIE is now with [China] State Grid, which is not a passive shareholder in ADMIE,” he said, causing the furore of MPs.
“State Grid adds technology, is the largest company in the world, has financial capability, lending, etc. It is a guarantee for ADMIE,” Stathakis said, prompting fellow-Crete deputy Vassilis Kengeroglou from Pasok to challenge the ‘passive shareholder’ comment.
He said that Stathakis has been systematically evading questions from his Cyprus counterpart and from the European Commissioner over why the approved planning of the Crete-Attica link had changed.
“Of course, they are trying to convince us that ADMIE is public, of which ‘only’ 25% has been given to the Chinese, but they have avoided to tell us that with a recent provision they have effectively handed over the majority package to the Chinese, thus, the controlling rights.”
Something to hide?
Former energy minister Yiannis Maniatis joined the debate, challenging Stathakis to explain why he had not published the letters sent by Cyprus Energy Minister Giorgos Lakkotrypis to enter into dialogue with EuroAsia Interconnector in order to lift the energy isolation of Cyprus.
“And the EU Commissioner for Energy, Mr. [Manuel Arias] Canete, with his own letter, tells him the same thing. I have requested through my questions for these specific letters by the Cypriot minister and Commissioner Canete to be submitted to Parliament, and Mr Stathakis' responses. They have never been submitted. What do they want to hide?”
Explaining the seriousness of the issue, New Democracy’s Costas Skrekas said, “We are in danger of the large interconnector not only losing [public] funds, we will lose the money for Projects of Common Interest, called PCIs, and from the Connecting Europe Facility, which is the fund for the interconnectivity of Europe, where we would be getting 300 to 400 million euros for the Attica-Crete section, and you are going to deny that money.
“And not only that, [the Commission] are preparing an infringement process, meaning a penalty imposed on Greece because you will not implement the PCI and you have not satisfied the TEN-E regulations,” Skrekas added.
“The electricity interconnection Israel – Cyprus – Crete – Attica, known as the EuroAsia Interconnector … is a project that we designed during the period 2011-2014,” explained Pasok’s Maniatis.
“We integrated it into the European funded programme for PCIs, with a view to getting around 350 million from the European funds – this is the first cable connecting two continents, Asia with Europe – it lifts the energy electricity isolation of Cyprus and the electrical isolation of Crete, and it helps to secure the country's energy balance.
“A project that was proceeding well, and for years now, serving suspicious purposes and suspicious interests, the government has led it to a stalemate. I submit for the record the joint communiqué of the Cypriot Government and the European Commission dated 27.02.2019 in which the EC Energy Directorate-General, the Cypriot Government, all Cypriot institutions, are begging the Greek government to reconsider its stance.”
Last Sunday, Cyprus government spokesman Prodromos Prodromou said: “the issue of the EuroAsia Interconnector is not closed, and negotiations are continuing”.
In a statement to the Athens News Agency regarding the electricity interconnection between Greece and Cyprus via Crete, Prodromou said the project was very important for Cyprus, not only for the development of the electricity market but also for the security of supply on the island.
“The interconnection will be financed by [EU] Community funds and is therefore feasible. There is a technical problem with some decisions in Greece that we hope to find a solution to that will not cancel out the possibility of its construction,” he said.
