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More clouds on the horizon for Greek port privatisation

More clouds on the horizon for Greek port privatisation
More clouds have appeared on the horizon as the Greek government seeks to sell its controlling stake in the Piraeus Port Authority (PPA) and meet demands of the country’s creditors.

Touted as the forerunner in the government's ambitious privatisation programme, interest among international buyers is once again being put to the test.

The sale of the state’s controlling stake in the PPA will go ahead Economy and Development minister Giorgos Stathakis, said 5 October. “The government will proceed as has been agreed,"said the Minister as Prime minister, Alexis Tsipras tabled the government’s first draft of the 2016 budget in Parliament.

Recent interventions by members of the government and local authorities, as well as officials from Tsipras' Syriza party, have not only put the success of the tender for the purchase of a controlling 51% stake, or is it the entire 67% stake, in the PPA at risk, but are said to be undermining the value of the organisation.

Privatisation of the port was a requirement of the third bailout agreed with the country's creditors. However, the recent national elections slowed down work at the ministries of Shipping and Finance. Now Greek officials have deferred the signing of the concession agreement for “about 20 days”.

But setting a date for the finalists, China’s Cosco Pacific, Netherlands APM Terminals and Philippines-based ICTSI, to submit their bids is proving difficult, with 30 October now the target. State sell-off fund Taiped, the port's main shareholder, is aiming to have the tender completed by the end of November.

Assessors hired by the PPA will determine a minimum price for sale of the controlling stake in the port company. This threshold will only be known by the PPA and its consultancy, not the interested bidders. The consultancy’s assessment will be delivered to Taiped's management at about the same time as are the bids by the suitors.

A number of parties have recently asked Taiped, to exclude the Drapetsona dock zone to the west of the central port from the new concession contract between the Greek state and the PPA. This zone is a relatively small strip of land but is key for the expansion of the port of Piraeus to include coastal shipping and cruise tourism. If the Drapetsona strip is excluded, people familiar with the bidders believe “any binding bids would be particularly reserved”.

In addition, the Attica Regional Authority and various entities from Piraeus have gone to court in protest to PPA's privatisation and the cases are due to be heard by country’s highest court, the Council of State this week.