(Greece) – Italy’s state rail operator, Ferrovie dello Stato, is set to purchase Trainose, Greece’s state rail operator, for 45 million Euro, or 50 million USD. Trenitalia was the sole bidder for Trainose after several other possibilities fell through just before the due date. This move will help Trainose stay operational and will prevent the trains in Greece from closing down due to lack of funds.
As part of Greece’s latest bailout, its third one since 2010, privatization deals such as these were a requirement by the international creditors. However, it has been difficult for Greece to close this particular deal because the economic situation in Greece has made investors wary of investing in Trainose. The Greek government has had to push back the deadline for the bids three times in 2016. In fact, Greece has been trying to sell Trainose since 2013.
Greece’s privatization agency, the Hellenic Republic Asset Development Fund, or HRADF, approved the day after meeting this past Thursday. If the deal hadn’t gone through, Trainose would have been forced to return the 700 million Euros that it received in aid. As a result of this, Trainose would have had to close down.
Because of the sale, railway workers across the country have been on strike for the past week. Although the strike had been scheduled to end, the sale of Trainose has led the union to continue the strike until July 17, 2016. Workers are concerned that the sale of Greece’s state railway will lead to a loss of jobs and to salary cuts.
Greece recently received its first wave of funds for this third bailout so that they could pay off loan balances due to the International Monetary Fund and European Central Bank. Other privatization deals that were required by the international creditors include the abandoned Hellinikon Airport, the Port of Piraeus, and several regional airports throughout Greece.