“We wish to deepen our strategic relationship with China,” said Shipping and Aegean minister Marine minister Miltiadis Varvitsiotis on 31 August commenting on the major step forward as international creditors upped the pressure on Greece to get its derailed privatisation programme back on track.
Varvitsiotis said the agreement came after the government opting to sell the majority of shares in the facility. He said a timetable for the tender will be announced soon. Cosco Pacific’s Piraeus Container Terminal (PCT), presently operates the port’s container piers II and III under a 35-year concession signed in 2009 and worth over $5bn.
On the occasion of the inauguration of PCT’s new container pier III, in July, Samaras said Cosco was planning the additional investment in pier IV to expand the terminal toward the western end of the port, saying a memorandum had been signed by the PPA and PCT. This memorandum provided for the suspension of Cosco’s annual fee of about Euro 70m to the PPA for the use of pier II and III in order to facilitate the pier IV investment.
Negotiations became bogged down, as PCT sought guarantees involving the privatisation of the PPA plus the period the fee suspension will apply.
PCT has confirmed its interest in the PPA privatisation tender. The state holds a 74% stake in the PPA.
There is a belief the state-controlled Cosco intends to develop a large logistics center in Western Attica and, possibly, set up a manufacturing park for the final assembly of products that would thus acquire a European “passport”.
Such a development has also attracted US interest, given the large number of American firms manufacturing products in China for export to Europe.
There is also another a major to overcome. The European Competition Commission has to agree to Greece’s plans. To now Greece has feared the EC would be unfavorably disposed toward any amendment of the original 2009 deal with Cosco, considering it hits illegal state aid hurdles. However, with Samaras to the fore this issue is said to have been overcome through a legal formula, which is yet to be publicly revealed.
Still, the PPA / PCT accord gives Greece's state privatisation agency, TAIPED, some encouragement, as the sale of Piraeus and the northern ports of Thessaloniki and Alexandrouplis are attracting interest from investors.
TAIPED is keen to expedite the privatisation sale of the Thessaloniki Port Authority (OLTh), in combination with the sale of Hellenic Railways’ operating company, Trainose.
The OLTh / Trainose combination is seen as a catalyst for success, raising the value of both assets and the revenues to accrue. Greece’s second port, Thessaloniki, cannot compete with Piraeus in the internal market, but investors see it as a gateway for cargoes destined for the Balkans and Eastern Europe, but for this it would need the support of a rail operator.
TAIPED said greatest interest in Trainose has come from investors in the Far East, again with Chinese said to be among them, and investors in Europe, led by the Russian rail organisation.
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