Following the second evaluation of the implementation of the bailout agreement in Cyprus, international lenders have revised terms outlining the fiscal and structural measures to be enforced in the country. As such, plans for the privatisation of semi-government organisations (SGOs) are set to be implemented by January 2014, local news agency In Cyprus reports. According to the terms outlined in the new memorandum, the Cypriot government ‘will initiate a privatisation plan to help improve economic efficiency through enhanced competition and encouragement of capital outflows and help to restore debt sustainability’. The plan will include the privatisation of SGOs Cyprus Telecommunications Authority (Cyta), Electricity Authority Cyprus (EAC) and the Port Authority.
As previously reported by TeleGeography’s CommsUpdate, the Republic should accumulate EUR1.4 billion from the privatisation process. An estimated initial deposit of EUR1.0 billion (USD1.35 billion), and a further EUR400 million must be secured by 2018, according to the terms of a EUR10 billion bailout deal struck by the government and international lenders. However, in a bid to avoid privatisation, Cypriot SGOs proposed to secure EUR1.4 billion by mortgaging their property for EUR1.2 billion and funding the remainder via loans from international companies. Further, incumbent telco Cyta’s chairman Stathis Kittis revealed in May 2013 that three institutions, originating from the UK and US, were interested in the proposal, although he did not name them.