LARCO – Full steam ahead for offers at the end of November

The procedures for dealing with the pending cases of the LARCO concession are accelerated with the Special Administrator and the HRADF having locked the dates for the submission of binding offers towards the end of November.

According to information available to OT.gr, the government and specifically the financial staff have instructed the two bodies of the two tenders to proceed in haste… in any way to close the open issues so that the three candidates can come up with their financial proposals for claiming the assets.

It is reminded that the first tender conducted by the Special Administrator concerns the transfer of the mines of Evia, Fthiotida, Viotia (Agios Ioannis area) and Kastoria, stocks of ores, by-products and recyclable materials as well as agricultural plots.

The second tender of the Privatization Fund concerns the long-term lease of the LARCO factory and the mines in Larymna and Loutsi. These are facilities and mining rights that belong to the state.

Pressures

The two tenders are now reaching the final stretch after postponements as, according to government sources, pressure is being exerted by the European Commission to close the LARCO case. Our country has been condemned for this because in the past the Greek state provided state aid of 160 million euros to the iron-nickel industry. With the decision of the European Court, this money will have to be recovered by the Greek state, otherwise for each day of non-compliance there are additional financial burdens. The government, as it is known, in order to avoid this decision, after an agreement with the Commission, took the decision to split LARCO into two parts and to follow tenders for their concession so that there is no continuity of the company.

Outstanding issues

The privatization to be completed presupposes the resolution of final but important pending issues by the Special Administrator and the HRADF, such as, according to sources, the configuration of the transfer texts to be signed with the new investor. Sources  reported to OT.gr that the contracts are in the process of being drafted with the bidders having submitted many comments.

In addition, the issue of employees seems to be going to be resolved. The same information wants the approximately 1,000 workers to be finally fired with the Ministry of Labor seeking the relevant funds for their compensation. The plan to transfer them to the public will not go ahead.

It is said that the Decision for the Approval of the Environmental Conditions required for the operation of the factory again is being led to closure. Although, according to government sources, there still seems to be a gap between the public and potential investors in terms of the time frame it will set for the implementation of environmental investments. Information states that the first plan of the Decision of Approval of Environmental Terms gave a margin of four years.

The shoot out clause

It should be noted that in the final phase of the submission of binding bids are supposed to be GEK TERNA – AD HOLDINGS AG, MYTILINEOS and COMMODITY & MINING INSIGHT IRELAND LIMITED.

The schedule, which has been set for the tender, as mentioned above is to submit bids by the end of November. Then the Special Administrator and the HRADF will evaluate the proposals.

For both competitions, the so-called “shoot-out clause” applies. According to this, the preferred investor in each of the two tenders will have the right, but not the obligation, to bid in the other tender, as long as it meets the relevant technical and financial selection criteria that have been determined.

The last procedure is scheduled for the beginning of December.