New Greek government puts shipping in its sights, cans port privatisation

Within hours of the radical left coalition party Syriza forming an anti-austerity governing coalition with the right-wing party, Independent Greeks a series of announcements signaled the government’s intent. There are going to be changes.

But, remembering Syriza itself is a grouping of different left-leaning ideologies and the Greek Independents are right-wing, and led by a boisterous, Panos Kammenos, just how long the coalition will stand is anybody’s guess. The partnership does have some things in common, notably they are vehemently anti-austerity but are pro-eurozone.

Seen as the first step in a necessary renewal of the Greek state, the cabinet overhaul involved the merging of ministries – with the creation of an Economy, Infrastructure, Shipping and Tourism ministry, which is ranked second in importance among the ministries, behind Administration Reconstruction. Though there is no stand-alone ministry, Syriza' previous shipping spokesman, Piraeus MP, Thodoris Dritsas, is alternate minister responsible for shipping.

And this is causing some unease within Greek shipping. Dritsas has already warned the shipping community shipping, as Greece’s most productive sector, should be prepared to “lift the heaviest possible burden” to help the country out of its crisis.

Tsipras, has said it wants to re-examine from scratch all tax concessions given to shipowners, something Union of Greek Shipowners president, Theodore Veniamis has warned him against. The future of shipping is not in doubt says Veniamis. "International shipping will continue in the future, despite the many attacks it may face. But the crucial question is who will manage shipping and from where," declared Veniamis, as the Greek flag continues its decline.

Further, prior to taking his oath of office, Dritsas announced the much hyped privatisation of booming Piraeus port is off. The same fate is certain to befall Greece’s second port, Thessaloniki.

Of the long touted privatisation of Piraeus through the sale of the Greek state's controlling 67% holding in the Piraeus Port Authority (PPA), Dritsas, declared when on route to the swearing-in of the government, “the public character of the port will be maintained. The sell-off stops here". The news saw the Athens Stock Exchange-listed PPA’s share price drop 12% in hours.

Privatisation of Piraeus and Thessaloniki was backed by Greece's creditors and was a key peg of the Samaras-lead conservative government’s fund raising efforts. The cancellation is an indication the future of Greece’s privatisation programme is ominous as the government has also announced it will block the sale of a stake in the country’s biggest utility, the Public Power Corp.

Privatisation of the ports attracted considerable interest among port operators with APM Terminals, Cosco (Hong Kong), ICTSI, Ports America Group Holdings and Utilico Emerging Markets keen on Piraeus.

Meanwhile, Cosco Pacific is moving forward with expansion of its local subsidiary Piraeus Container Terminal (PCT) under its 35-year concession agreement to operate container terminals II and III. Indeed, coalition partner, Panos Kammenos, as Marine minister in 2007 – 2009 played a leading role in cementing this highly successful agreement with Cosco.

Attending a groundbreaking ceremony marking the launch of Cosco's Euro 230m development project at its terminal III, was one of the last acts of outgoing Premier Samaras amid reports even then, if elected, Syriza planned to rein in Cosco’s activities in the port. The Chinese see Piraeus as a major gateway on the new Silk Road connecting Asia to central and eastern Europe and providing more working opportunities to local citizens

In a sign of the potential sensitivity of the move to cancel the privatisations, Tsipras’ second official meeting was with China’s ambassador to Athens, Zou Xiaoli to stress the importance of good relations with Beijing.