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Cosco Shipping's Piraeus plans dealt a blow

Greece's Council of State has bowed to the objection of two major Greek construction companies and dealt another blow to Cosco Shipping's plan to further develop the port of Piraeus.

On 30 November the Council froze the tender for the construction of a new cruise terminal in the Greek port, a key pillar port's 'investment master plan' which Cosco is committed to implement under its agreement when purchasing control of the Piraeus Port Authority (PPA) two years back.

Indeed, the Council's decision was the latest in a growing number of reverses for Cosco Shipping-controlled PPA which is struggling to secure
government approval of its 'master plan' that aims to attract more business to one of Europe's largest ports.

It also comes amid signs of growing incompatibility between the Greek and Chinese corporate cultures. Investment plans have stumbled on the licensing process and increasing objections, mainly from groups with vested interests in the PPA when it was state-owned.

The Infrastructure and Transport ministry refused to give a license to the PPA for the port's unification with a 90,000 sq m plot owned by the former Public Property Management Organisation for the development of logistics facilities deeming it would compete with the nearby Thriasio zone, one-third of which has been conceded to a private consortium, with the rest going up for grabs by tender soon.

The PPA's application for a shipyard permit was rejected by the Economy Ministry, following strong reactions by Greek contractors and small
shipyards fearing the competition would drive them out of the market.

Though the privatisation of the PPA and the 35-year concession granted to Cosco to run container terminals II and III have been hailed, the port's
boss Captain Fu Chengqiu has repeatedly complained about the government's foot-dragging over giving the go-ahead for the 'master plan' which has two pillars; the mandatory projects and a voluntary investment programme, the latter including the new cruise ship terminal, a mall and four five-star hotels in the port.

Under Cosco-led management Piraeus has boomed. It has risen to 37th place on the global chart of container ports, and to third in the Mediterranean ­ with the Chinese promising the region's number one spot. However, these achievements do not seem to be making an impression with parties that had expected an instant boost to their takings from the inflow of Chinese capital.

Instead, they see the old status quo collapsing and Chinese plans for shipyards, malls and hotels threatening Piraeus' existing economic
landscape. There has been opposition from tradesmen and the Piraeus Chamber of Commerce, which are concerned about competition, while the upcoming general elections see state and local authorities wary about making any major decisions.

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