EAC unions to ditch April 6 strike after meeting Anastasiades (Update-1)

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(Adds more comment by government spokesman in seventh paragraph and comment by EAC chairman in eighth paragraph)

By Stelios Orphanides

Workers at state-owned power producer Electricity Authority of Cyprus will be asked to scrap plans for an indefinite strike starting on April 6, a union leader said after a meeting with President Nicos Anastasiades.

“We shall all work to make this separation work,” Andreas Panorkos, who heads the EPOPAI union, was quoted as saying by the Cyprus News Agency after he and other EAC union leaders met Anastasiades on Wednesday. Panorkos was referring to a government plan to split the company into two separate entities, one in charge of production and supply, and another in charge of transmission and distribution.

Panorkos said that he was happy with the explanations given by Anastasiades on the government’s plan while deputy government spokesman Victor Papadopoulos said the meeting was “constructive” and the president was satisfied with the unions’ stance.

The unions announced the strike on March 23, citing fears that the separation of the company would be the first step towards its privatisation, which they oppose, and the government ruled out in December. The strike, in which the entire staff was scheduled to participate, could disrupt economic activity and harm Cyprus’s economic recovery, a month after it exited its adjustment programme.

Papadopoulos said that the government’s January 11, decision to go ahead with the separation of the power company, which enjoys a virtual monopoly on the market, “is clear”.

“There are stages and conditions to get there,” he said. “What matters at this stage is to completely and successfully implement the unbundling of operations and accounts in order to see results”.

Anastasiades “paid attention to the unions’ concerns” and explained the cabinet’s decision in detail, Papadopoulos said. He added that the cabinet decided to fill 13 vacancies related to the decision to split the company.

EAC board chairman Othon Theodoulou, who also took part in the meeting, said the power company got “the necessary time to implement the operational and accounting unbundling, which had already started.” The state is also getting time to review “various factors” in the sector.

Andreas Poullikkas, head of Cyprus’s energy regulator, said on December 10 that his agency was planning to implement a new electricity model, which would open the market to competition in 2018, instead of 2016, as was initially planned. Poullikkas cited technicalities, such as switching to a new software system and the need to prepare detailed regulations, for the decision.

Cyprus, which is expected to start extracting natural gas at the Aphrodite finding off its southern coast by 2020 the earliest, hopes to use part of the production to fuel the EAC’s generators in an attempt to reduce electricity prices, which both Cypriot companies and households consider excessive.

The cabinet’s decision to split the company was one of three prior actions required for Cyprus to get the last remaining tranche of bailout funds in March. While the government satisfied this condition, the decision of opposition parties to block a draft bill that provided for the establishment of Cyta Ltd, which would take over the state telecom’s operations, as part of the government’s privatisation plan, deprived Cyprus access to the funds.

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