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EC subsidies issue stymies Chinese interest in Greek shipyards

EC subsidies issue stymies Chinese interest in Greek shipyards
Greek Prime Minister Alexis Tsipras, is heading the drive to muster up Chinese interest in the sale of Greece's two largest shipyards.

Tsipras'deputy Yiannis Dragasakis and Economy and Development Deputy Minister Stergios Pitsiorlas have also approached the Chinese regarding the Greek government’s keenness to sell the facilities, in a bid to kick-start the country's shipbuilding and ship repair industry.

However, the high level approaches to China's Cosco Shipping seem to have fallen on deaf ears with the Chinese company reluctant to get involved as the Athens' left wing government battles with the European Commission regarding the return by the shipyards of state subsidies.

Three years ago the Antonis Samaras-led conservative government also failed to entice Cosco for the same reason.

While Cosco has said it is interested in being involved in ship construction and repair in Greece, its management is not willing to get engaged in an on-going state subsidies issue.

Greece was taken to the European Court of Justice by the EC for failing to recover EUR250m ($275m) in what Brussels considers to be illegal state aid to Hellenic Shipyards.

Analysts say the amount said to be outstanding could run to EUR540m including interest and would burden the buyer of the shipyards.

Further, Cosco is already facing problems as it tries to finalise the transportation of the first of two floating docks it has ordered for the Piraeus Port Authority (PPA) ship repair zone.

The dock is expected to arrive in Piraeus late spring or early summer depending on when the Chinese group finds a ship able to transport the 80,000-tonne post-panamax dock, with a second, larger dock, slated to follow provided the licensing process can be completed for the first dock without any hitches.

The second dock is a 300,000-tonne capesize floating dock, with Cosco hoping installations can be quickly completed and the new facilities are up and running without delay.

Though the Shipping and Economy ministries are seeking the fastest possible installation of this equipment as Cosco has committed itself to operating ship repairs in the Greek port, location of the installations is still to be decided with local authorities and other community groups in areas in or adjacent to the ship repair zone have raised objections and are preparing to fight the arrival of the docks, citing environmental or archaeological reasons.