EDSNA: Admission of Patoulis’ “black hole” and inability to pay debts – Intervention of the NTA

Attica’s waste management company, EDSNA, admits in an official document to exhausted
funds and an inability to pay debts, confirming the "black hole" left by the regional
administration under George Patoulis, as well as the inaction of the Mitsotakis government
in the imminent collapse of a system already operating on the brink.

Following up on their report of April 18, 2024, Data Journalists have uncovered new
evidence highlighting the dire state of the institutions responsible for burying waste in Fyli.

Σχετικό άρθρο: Unveiling Patoulis. Black Hole’s: The 200 Million Euro Mystery

In fact, according to information received, a request has been made to the National
Transparency Authority to investigate the matter, as part of the continuously growing
financial deficit is due to fees paid by municipalities in 2022 that should have been allocated
to another entity.

The new evidence indicates that the government allowed a group of individuals to operate in the Attica region throughout 2020-2023, overseeing several funds simultaneously, managing tens of millions of euros, and signing contracts without ever feeling accountable for potential scrutiny. Perhaps this is what Kyriakos Mitsotakis meant when he spoke of the “executive state”… Let’s review the situation from the beginning:

• EDSNA is the entity that receives 1.8 million tons of waste annually from the municipalities of Attica, but the region primarily oversees its management. It charges €53.6 per ton for disposal and thus has guaranteed annual revenues of approximately €97 million. Based on these revenues, it had a significant surplus until 2019. However, after 2020, the costs started to increase and will double in 2022 (€172 million) compared to 2019. The result, as mentioned in the previous publication, was the depletion of the surplus and the appearance of an operating deficit of €38 million in 2022. It is worth noting that the balance sheet for 2022 was approved with a delay only a few days ago, on 11/04/2024.
• However, in addition to this “primary deficit,” another amount is added from the money paid by municipalities in 2022 for the additional “landfill tax. This tax, €20 per ton of waste disposed of, was supposed to be an incentive to increase recycling. For this reason, this money should not be retained by EDSNA but should be allocated to the Hellenic Recycling Agency (HRA) according to Law 4819/21. The amount of this money that EDSNA continues to withhold was initially estimated at 36 million euros.
• HRA should have received the majority of these funds from 2022 to organize its own initiatives, increase recycling, and reduce the amount of waste going to landfills or incinerators, as planned by the government. However, HRA only received €1.5 million and does not appear to have made any further commitments. And why should it, when the president of HRA was appointed by the government at the time, Nikos Chiotakis, who was also vice-president of EDSNA?
• Until the summer of 2023, this violation of Law 4819/21 seemed not to have occurred. EDSNA continued to operate, signing contracts worth hundreds of millions of euros to promote recycling, supposedly instead of HRA. There were even EDSNA executives at the time who claimed that there was no other way because the government had promised to include the agency’s projects in European funding, but had not done so. Mr. Patoulis did not sign these contracts, but by his right-hand man since 2010 in the Municipality of Amaroussion, Vasilis Kokkalis, a local New Democracy figure and experienced hunter as the “Federal Gamekeeper of the Fourth Hunting Federation”.
• In the summer of 2023, Patoulis ceased to be New Democracy’s choice for a second term in the region, under the pretext of a zeibekiko he danced while half of Greece burned. Chiotakis (former mayor of Kifisia 2010-2014) had already resigned from the HRA to run as a candidate alongside George Patoulis. In the end, he was elected together with Nikos Hardalias with almost 12,000 votes in the northern sector. However, Vasilis Kokkalis was also elected alongside Nikos Hardalias.
• After the elections, Alexandra Togia, a long-time associate of Dora Bakoyannis, took over the leadership of the HRA, looking for the 36 million euros, but found that the EDSNA had only allocated 1.5 million euros to the organization. She also saw some strange reports accusing her of not returning the €1.5 million to EDSNA…
• The “executive state” began to wake up from its 41% lethargy as 2024 Then the Ministry of the Interior decided to send a document to EDSNA asking “what happened to these funds”. This had been preceded by many protests from municipalities in Attica, mainly from mayors, who found that they had been charged twice for the 2022 landfill tax. What had happened? At the end of 2023, the Ministry of the Interior made a decision, paid the outstanding amounts to the HRA (€129 million for all of Greece, including the first half of 2023) and announced to the municipalities that it would deduct the amounts from their subsidies. However, the municipalities of Attica were among the few that had paid the landfill tax for 2022 and now found themselves being “charged” again.
• EDSNA‘s response came with the document we are publishing today. It is not signed by the president of EDSNA, Babis Siatras (former secretary-general of the ND parliamentary group), the only person so far appointed by Nikos Hardalias. It is signed by George Zacharopoulos, president of the workers of the organization for the last 15 years and financial director of EDSNA. Mr. Zacharopoulos became Financial Director under George Patoulis, although he was a candidate with Yiannis Sgouros in 2019, and he is “credited” with the success that there was never a strike by landfill workers during his tenure.

 

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• * In this document, the administrative-labor factor says a lot:
• * First, the amounts withheld for the year 2022 total €34,668,789, but only €1.5 million was paid to HRA on 29/12/2022.
• * Second, EDSNA submitted a request for settlement to HRA to pay part of the debt (first half) in installments, but HRA did not respond.
• * Thirdly, and most importantly, that “there are no available cash amounts related to the landfill tax for the year 2022”.

(pdf HERE)

And here is where things get even more interesting. EDSNA requested the settlement by a decision of its Executive Committee on October 7, 2022. The President, Mr. Vasilis Kokkalis, and the Vice President, Mr. Nikos Chiotakis, voted for the decision. Therefore, Mr. Chiotakis, as Vice President of EDSNA, requested a settlement from HRA, but as President of HRA, he did not respond to the request, according to Mr. Zacharopoulos.

To justify paying the fees in installments, EDSNA cites the energy crisis, which “has led to a huge increase in expenses related to the purchase of oil for the vehicles it manages, as well as those related to the electrification of all its facilities. It also states that it pays almost half of its income in compensation to the community of Fyli and other communities affected by the operation of the landfill. However, among the members of the Executive Committee who voted (and continue to vote, as there is still no new management in place) is the mayor of Fyli, Christos Pappous, whose municipality receives nearly €40 million annually.

The theater of the absurd doesn’t end here. According to Mr. Zacharopoulos, the HRA did not respond to EDSNA’s request for a settlement submitted in October 2022. The debt at that time (first semester) was €17.1 million and EDSNA proposed to pay €10 million by the end of October and the rest by the end of December. HRA, i.e. Mr. Chiotakis, did not respond but agreed to receive the €1.5 million “against the debt” on December 29, 2022.

On the other hand, the energy crisis invoked by the EDSNA management has no effect whatsoever on the invoices it sends to the municipalities for the burial of Attica’s waste. As can be seen from the pricing regulations approved by EDSNA‘s Executive Committee, the organization continues to bill the municipalities based on 2020 data, as if nothing has changed since then. Moreover, the most recent regulation for 2024 was also approved a few days ago, on April 11, 2024, by an Executive Committee composed of individuals with the same roles they had before and which do not apply after the 2023 elections.

(pdf HERE)

(pdf ΕΔΩ)

Based on all the aforementioned points, the revelation by Data Journalists confirms to the detriment that EDSNA is heading towards an accumulating deficit, a “black hole” amounting to 200 million euros:

• In 2022, it officially closed with a deficit of 38 million euros and a debt of 34 million euros from the withheld landfill tax.
• The deficit will continue to accumulate in 2023 and 2024 as EDSNA bills municipalities based on 2020 data.
• EDSNA has signed several contracts (procurement and leasing) for which it will have to pay significant amounts in the coming years.

Six months after the elections of October 2023, the new regional governor of Attica has not yet appointed a new management at EDSNA. Obviously, he is aware of the bomb ready to explode in EDSNA’s finances, but so far he is shielded behind the control of the sworn auditors appointed in February.

It also remains unknown what Mr. Hardalias will do if the sworn auditors or the National Transparency Authority find responsibility in those elected with him.

Will the financial problem lead to an increase in fees and municipal taxes for the millions of residents of Attica?

How long can the landfill in Fyli continue to receive millions of tons of garbage, while recycling is struggling? In recent years it has been operating with expansions, but the contractor (HELECTOR) also needs to be paid.

What will happen with the frozen tenders for the huge waste treatment plants with RDF announced by Mr. Patoulis for 2021, with a cost of 1 billion euros?

A picture is worth a thousand words

They may resemble masked robbers, but they are the central figures surrounding the “black hole” of Attica’s waste management agency, EDSNA.

On the right is Vasilis Kokkalis, the agency’s president, re-elected in 2023 alongside Nikos Hardalias. Next to him is the former regional governor of Attica, George Patoulis. According to the caption of the time (2020), he is handing over an envelope with Christmas gift vouchers from sponsor offers to George Zaharopoulos, President of the Employees and Economic Director of EDSNA.

Mr. Zaharopoulos signed the document uncovered by Data Journalists acknowledging that “the treasury is in deficit” to allocate the 34.7 million to the Hellenic Recycling Agency (HRA). On the left is Nikos Chiotakis, who was on the board of both EDSNA and HRA. Mr. Chiotakis has also been elected as a Regional Councillor in 2023 alongside Nikos Hardalias. The 34.7 million is a small part of the “black hole” of EDSNA, which is estimated to reach 200 million euros.