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Greece wants existing privatisation agency to handle announced tenders

[ATHENS] Greece wants its existing privatisation agency to handle current tenders because setting up a new one will take time, a senior privatisation official said on Wednesday.

The issue - described as minor by Finance Minister Euclid Tsakalotos on Tuesday - has held up final agreement on privatisation in talks with lenders this week.

Greece clinched a last-minute deal with its lenders last month to negotiate a third bailout to keep it in the eurozone.

Under the deal, the country has pledged to wrap up a series of privatisations that were halted when the leftist government of Prime Minister Alexis Tsipras came to power in January.

"All pending tenders ... for the ports, the state natural gas firm DESDFA and the railway operator Trainose, will move ahead," the official said.

Greece is holding talks on fresh loans of up to 86 billion euros with the European Commission, the International Monetary Fund, the European Central Bank and the EU rescue fund, the European Stability Mechanism. It has said it expects to conclude a deal on time to pay off an ECB bond that matures on Aug 20.

Its existing privatisation agency had been meant to raise 50 billion euros by 2015 under the terms of Greece's first bailout agreement signed in 2010 but has cashed in only about 4 billion euros so far.

Greece must now transfer valuable state assets to a new, much bigger fund which aims to raise 50 billion euros. The cash will be used to recapitalise its banks, pay off debt and fund much-needed investments.

"There are several ideas on the table. It's a difficult exercise," the official said.

"If the structure (of the agency) changes and we try to set it up from scratch, it will take time and the whole programme will be pushed back." Greece's leftist government initially put on hold all privatisations launched by the previous conservative government.

But under pressure from the lenders, it unblocked the sale of a 51 percent stake in its biggest port, Piraeus, in May, asking three firms to submit bids by September.

The tender is now expected to be concluded by early November, the official said.

Investors will also be asked to bid for railway operator Trainose and Greece's second biggest port, Thessaloniki Port , by end-2015 and by early 2016 respectively, the official added.

A 1.2 billion-euro deal for the lease of 14 regional airports to Germany's Fraport was also expected to be wrapped up in the fall.

"We are in discussions with the Germans to conclude it. We hope for this to happen in autumn, no later than November," the offical said.