News:Europe

Cosco to sort out Greece's floundering shipyard sector?

Executives from Chinese group China Cosco Shipping have been briefed by the Greek government as it pledges to sort out the future of the country’s floundering shipbuilding and shiprepair industry.

At an inter-ministerial meeting Greece’s State Minister, Alekos Flambouraris, Shipping and Island Policy Minister, Panagiotis Kouroumplis, and deputy Development minister, Stergios Pitsiorlas briefed Cosco officials on the situation concerning the country’s second and third shipyards Elefsis Shipyards, Elefsina and Neorion Shipyards, Syros, the former located close to Piraeus container terminals which are operated by Cosco.

The Cosco team was briefed and told of the government's keenness to find a solution for the troubled yards, which will see them both back in business.

It was said the Chinese sought more detailed and analytical information on the status of the two shipyards before deciding whether to proceed with a detailed offer.

Main issues of concern are the level of debts of both shipyards and who will be responsible for payment, the future of the workers and some other financial details.

The briefing meeting came in the wake of a decision by the International Arbitration Court of the International Chamber of Commerce which has “seemingly ordered” the Greek state to pay between EUR150m ($177m) and EUR200m ($236m) to the Lebanese group Privinvest, which took control of Greece¹s largest shipyard, Hellenic Shipyards in 2010.

The long-awaited decision came after Privinvest made demands against the Greek state for violation of agreements related to the purchase of Hellenic.

However, many believe the 500-page decision relayed to each side by e-mail, 3 October, creates more questions than answers.

The Greek government has worked to arouse Cosco¹s interest in this facility, but the Chinese have made it clear they are not interested until the legal wrangling is settled.

Economy ministry officials have indicated the decision may now open the way allowing Athens to place the yard under “special status” and divide it in two, one for military and one for commercial business, before being auctioned under international bids. Defense ministry sources, however,said the decision was considered a split, since the court rejected many of the requests from the leader of Privinvest, Lebanese national, Iscandar Safa.

Further, an earlier European Court ruling has Hellenic Shipyards owing about EUR550m to the Greek state for illegal subsidies provided at the beginning of the last decade. This decision has not been implemented because the shipyard was split in two, with the commercial section having to be auctioned and the military one unable to undertake projects other than for the Hellenic Navy until 2025.

Posted 12 October 2017

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David Glass

Greece Correspondent, Seatrade Maritime