The Hellenic Republic Asset Development Fund (HRADF) was established on 1st July 2011 (L. 3986/2011), under the medium-term fiscal strategy. The new law aimed to restrict governmental intervention in the privatisation process, and its further development within a fully professional context. Subsequently, the old privatisation process under the Law 3049/2002 was abandoned.
The Fund is a “societe anonyme”, of which Hellenic Republic is the sole shareholder with a share capital of €30 million. The Fund is not a public entity and is governed by private law. The assets transferred to it by the State do not form part of its share capital.
The Board of Directors is comprised of five members and is appointed by the General Assembly for a three year term. Prior to this appointment the Committee of article 49A of the Parliament’s Regulation formulates an opinion on the suitability of the proposed persons for the positions of Chairman and CEO of the Fund.
Two observers have also been appointed to the Board; one from the Eurozone and one from the European Commission. The Board has the absolute authority on privatisation decisions. The CEO is fully responsible for the operation of the Fund and introduces the privatisations to the Board of Directors for decision making.
Most of the assets contained in the medium-term plan have been transferred to the Fund, while other assets which the Hellenic Republic has decided to develop or sell will also be transferred. Any asset transferred to the Fund is to be sold, developed or liquidated. The return of any asset back to the State is not allowed.
The assets transferred to the Fund can be grouped in three categories:
- real estate
- company shares
Specifically, the following have been transferred to the Fund by Inter-ministerial Committee Decision:
- 35 Real State buildings
- Shares of Athens International Airport S.A.
- Shares of Hellenic Petroleum (HELPE)
- Shares of ODIE (Hellenic Horse Racing)
- Shares of Ellinikon
- Shares of LARCO
- Shares of the Athens Water Supply and Sewerage Company (EYDAP)
- Shares of Thessaloniki Water Supply and Sewerage Company (EYATH)
- Shares of OLP
- Shares of OLTH
- The economic rights of Hellenic Motorways
- Shares of the Hellenic Football Prognostics Organisation (OPAP)
- Shares of ALPHA Bank
- Shares of National Bank
- Shares of Piraeus Bank
- Rights of natural gas storage in South Kavala
- Rights of State Lottery Tickets
- Gaming Rights to Hellenic Football Prognostics Organisation (OPAP)
- Rights of 39 Regional Airports
- Rights of “Mobile Spectrum”
- Rights of “Mobile Telephony Frequencies” Shares of
- Voting Rights of Hellenic Post (ELTA)
- Voting Rights of 10 Ports
The decisions of the Board of Directors take into account the opinion of the Council of Experts, which, however, is not binding. The Council of Experts is composed of seven persons with broad experience and strong academic qualifications. Four persons are appointed by the Board of Directors and three by the Troika. The Council of Experts gives its opinion on every privatisation. The privatisation process is described in Law 3869/2011.
The Board of Directors meets regularly to approve key points of the tender process, the pre-selection, the principal terms of the contract and the selection of the final investor. For a decision to be adopted a simple majority of the Board members is required. The Council of Experts opinion reflects its majority.
An independent evaluator intervenes at the end of the process, whose opinion is also taken into account by the Board in its deliberations. Upon the adoption of a decision by the Board on a privatisation, the contract is submitted to the Audit Office for a pre-contract audit. On average, a privatisation process lasts from 9 up to 15 months, from the beginning of the procedure up to the deposit of the consideration with the Fund.
The Fund publishes quarterly reports, has internal regulations, internal and external auditors and is subject to Parliamentary monitoring.
The Fund is staffed with seasoned professionals from the banking, consulting and legal sectors assisted by a Council of Experts and employs experienced international advisors for each project. It has state of the art project management systems and a very flat organizational structure to facilitate speedy decision making.
The Fund has approved the Asset Development Plan (EPA) which is reviewed every 6 months. To develop the EPA, the Fund took into account:
- The expected revenue from each privatisation
- Its long-term benefits
- The complexity and initial state of each project
The Hellenic Republic privatisation scheme is the largest declared divestment programme in the world. It is aiming at attracting significant international capital flows that will contribute to restarting the Greek economy and fuel economic growth. HRADF efforts will be based on three pillars: clarity of purpose, transparency of process and speed.
All announcements concerning the Fund will be posted on the internet, at the HRADF website, in order to provide full information and transparency.