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Waste of Greece’s public money: FinMin pays rent €220K/m for privatized Phantom building, but civil servants refuse to move in

The story of a traditional Greek madness, of an example how the public money is been wasted. For unknown reasons the state buys a real estate from a private  company, it keeps the building unused and empty, for several years, it refurbishes and privatizes it in order to fulfill creditors’ demands, and pays rent for the building to the new owner in the terms of “sale and lease back” because civil servants do not want to move there.

The famous Keranis building, a phantom building of 42,300 sq m that costs the Greek taxpayers at least 2.64 million euro per year. And not only! As the finance Ministry pays also rent for several real estate to house its staff, the yearly expense for rents only is exorbitant. “In 2011, the Finance Ministry was paying 5.7 million euro per year for 19 main buildings (from 51 in total) and that relocation the cost would drop down to zero,” daily Kathimerini noted in March 2015.

“The monthly rent we pay for Keranis building is 221,000 euro per month,” Deputy Finance Minister Tryfon Alexiadis told reporters on Monday adding that “this is a striking example of how the Greek state wastes money.”

Now the government plans to have relocated all departments and 1,023 employees of the Finance Ministry to Keranis building by next September. And as many time in the past years since 1998, civil servants protest the relocation claiming that the closest metro station is 3 km away.  Of course, they could cover this 3-km distance with a bus but I’m afraid the comfortable Greek civil servants would be degraded to the level of the workers in the private sector with some of them having to use 2 buses and 2 metro lines, which is around 1.5 hour one way to reach their work and thus for 500 euro per month.

Civil servants under previous government managed to avoid the relocation. I have no idea whether this government will simply let their objections be “objections” and proceed with its plans.

Currently the Finance Ministry has its staff working in 7 different building and pays monthly rent a total of 232,000 euro.

In real world words:

the Greek Finance Ministry pays 232,000 rent for current usage + 220,000 per month for the empty Keranis building = 452,000 euro per month!

The Keranis building was privatized in 2014 under the New Democracy/PASOK government and was sold to company “Ethniki Pangaia” that bought also another 13  state-owned real estates for a total of 115.5 million euro.

The terms & conditions were foreseen “sale and lease-back” scheme. The Greek state would have to lease for 20 years and later decides if it would buy back the real estate. or find another leaser.

The building on Thibon Avenue in Rentis-Nikaia Municipality has been refurbished twice.

SP the problem with civil servants is that they do not care about wasting public money because they think it is “public” money and not theirs. And they are comfortable for as long as they receive their monthly wages on time, benefits and allowances included.

Keranis was one of the strongest Greek cigarettes producing companies. Established in 1933, it was sold in 1998 by the owners’ children. The company closed in 2007, after it went bankrupt in 2005.

I cannot tell you why the Greek state bought the Keranis building in 1998.

Μέσα στο ιστορικό κτίριο της καπνοβιομηχανίας ΚΕΡΑΝΗ

A wonderful photo report from 2013 of the abandoned Keranis building here.

Μέσα στο ιστορικό κτίριο της καπνοβιομηχανίας ΚΕΡΑΝΗ

PS Need to write a post about the benefits of Greece’s assets privatization lol

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  1. Ok… Cut this servant

  2. Bought by the Greek state in 1998 — ah, the wonderful years of quietly tolerated, yet barely concealed massive corruption by Pasok. How strange it seems that only one politician ended up in gaol from that period; and the one politician who lost his political friends, too. The rest of them seem to be very happy with their wealth and freedom…