ATHENS, Sept 2 (Reuters) – China’s largest bulk shipper COSCO Holdings Co Ltd has agreed a multi-million euros expansion of its container operations at Greece’s biggest port Piraeus (OLP), easing the way for the port’s privatisation.
Under a deal announced by Greek officials on Monday, COSCO will be excused paying fees to OLP in return for making the investment, removing a question mark over growth at the port and taking the state a step closer to selling its 74 percent stake.
In turn this could add impetus to Greece’s ailing sell-off programme, which has been hampered by the wariness of international investors to buy assets in the recession-hit country but which remains vital if Greece is to keep receiving bailout funds and debt relief from its international lenders.
“This agreement is as valuable as the initial one which brought the Chinese company to Greece,” shipping minister Miltiades Varvitsiotis told newspaper Naftemporiki.
COSCO took over management of OLP’s container port in 2008.
Under the terms of the agreement, COSCO will spend 230 million euros ($303 million) to increase Piraeus’s cargo handling capacity by two thirds over the next seven years to an annual 6.2 million 20-foot equivalent units (TEUs).
In exchange, the deal suspends the fixed guaranteed fees COSCO was contractually obliged to pay to OLP, until Greece’s gross domestic product (GDP) returns to its pre-crisis level of 2008, “plus 2 percent each year”.
According to Greek GDP forecasts, this concession effectively suspends COSCO’s payments until after 2020, saving the Chinese company at least 250 million euros.
The deal will be submitted to the two companies’ boards for final approval.
Piraeus, one of Europe’s busiest tourism ports handling about 20 million passengers a year mainly to and from the Greek islands, aspires to boost its cargo trade and become a gateway for Chinese trade into the region.
Its container port handled a total of 625,914 TEUs of cargo last year, up 28 percent on 2011 but still 6 percent below its 2009 level reflecting the damage to Greek trade from the economic crisis.
OLP has a stock market value of 421 million euros. Greece hopes to attract private investors to run the company, either through a direct share sale or a concession. COSCO is seen as a possible contender in the sale.
Under Greece’s privatisation plans, its second-biggest port at Thessaloniki and other regional ports are also up for grabs. ($1 = 0.7584 euros) (Editing by David Holmes)
SINGAPORE, April 24 (Reuters) – Demand for liquefied natural gas (LNG) to power ships will rise this year on attractive prices, while more dual-fuel vessels join the global fleet, industry executives said....
The Georgia Ports Authority and Wallenius Wilhelmsen have signed a 20-year terminal lease agreement consolidating the company’s handling of automobiles and roll-on/roll-off cargo at the Port of Brunswick. The lease, which includes options for...
By Gavin van Marle (The Loadstar) – The main US ports enjoyed another stellar month in March, according to new figures from noted analyst John McCown His figures show imports at...
April 22, 2024
Total Views: 954
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.