Greece sells controlling stake in Piraeus port in privatization deal to Chinese

Greece sells controlling stake in Piraeus port in privatization deal to Chinese
April 8, 2016 6:03 pm
Greece sells controlling stake in Piraeus port
Kerin Hope in Athens

Greece has sold a controlling stake in the country’s largest port to Cosco, the Chinese state shipping group, as Athens continues to reverse its previous opposition to major state-asset sales in order to comply with its international bailout terms.
Alexis Tsipras, Greece’s prime minister and leader of the leftwing Syriza party, agreed last July to complete a series of infrastructure privatisations launched under the previous centre-right government, in accordance with the terms of the country’s third bailout by the EU and International Monetary Fund.
Cosco will acquire 67 per cent of Piraeus Port Authority for €368.5m and will invest more than €500m in new facilities. It will also continue to pay an annual fee to the Greek state under an existing deal, signed in 2009, to manage two container terminals at Piraeus port.
Mr Tsipras opted to host the signing ceremony at his own office, underlining his government’s newfound enthusiasm for infrastructure deals with foreign investors. Syriza was firmly against the sale of critical state assets when it swept to power at the start of last year and hardline cabinet ministers continue to oppose and delay such deals.
“I think this agreement will shorten even more the Silk Road that brings goods from China to the Mediterranean and central Europe,” Mr Tsipras said at the signing ceremony. “Our message is that Greece is open to investments that bring development, provided that they respect labour relations and the environment.”
Xu Lirong, president of Hong Kong-based China Ocean Shipping Company, said the group planned to embark on investments “that will help PPA reach its full potential to become one of the leading ports in Europe”.
However, as the ceremony took place, hundreds of Piraeus port workers protesting against the deal clashed with riot police in a park close to the prime minister’s office.
Theodoros Dritsas, the shipping minister and a vocal critic of privatisation, told reporters on Friday: “I can’t agree with this sale, which contravenes Syriza’s own policy platform and that of the government.”
Greece’s privatisation agency, Taiped, in December also signed a €1.2bn deal with Fraport, Frankfurt’s airport operator, and Greece’s Copelouzos construction group to operate and upgrade 14 regional airports under a 40-year concession. The airports in question handle two-thirds of Greece’s tourist traffic.
But the completion of the deal has been delayed because of foot-dragging by Greek civil aviation and transport ministry officials, who have been spurred by Christos Spirtzis, the hardline deputy economy minister who publicly opposes the terms of the deal.
Tenders for other infrastructure sales — including those of the Thessaloniki port authority, the Greek railway operator and a separate company that owns the network’s rolling stock — have also been delayed. These tenders were likewise agreed under the bailout but are opposed by trade unions and Syriza cadres.
George Stathakis, the economy minister, warned this week that the target of €15bn from privatisation sales agreed with creditors would not be achieved and should be cut to around €6bn