Monday, June 20, 2011
Greek Privatization
There is a lot of talk about Privatization in Greece and that brings to mind the reverse process that took place about 50 years ago.
In the 1920s a British company had received a contract for electrical power generation in Athens and its surrounding area. This ensured, for the first time, adequate power supply for the region. (Another foreign company was given the contract for the water supply.) The company was well managed and continued to perform well but in the late 1950s the Greek government decided to buy off the foreign investors and make the company part of a state owned enterprise. I worked for the British company during 1959-61 so I experience the change in management first hand. (The changes resulting from the Nationalization were a factor, although not the major, in my decision to leave the company and come to the U.S. for graduate studies.)
Things came to a grinding halt. For example, we had to buy supplies from the lowest bidder, regardless of the quality. One case that stuck in my memory was that of firebricks for boiler insulation. The low quality bricks we had to buy under state regulations did not last very long, so the boilers had to shut down far more frequently than before. Of course shutting down a boiler meant eliminating some power generating ability that often resulted in blackouts.
Another memorable statement was one that justified a reduction in the compensation of employees and engineers in particular. "You work now for the Greek people, not for British capitalists, so you have to be paid less."
