In Hellenic Shipping News 15/05/2015
Cosco Pacific, the port unit of China Ocean Shipping Group, seems to be distancing itself from any involvement in a port privatisation plan in Greece, where a new leftist government has tried to shed austerity commitments, casting doubt on further investment by the Chinese firm.
“Any decisions related to [the bidding] of Piraeus Port Authority (PPA) are made at our parent group level,” vice-chairman and managing director Qiu Jinguang said after Cosco Pacific’s annual general meeting on Thursday. “We are not involved at all.”
The comments mark a U-turn from the company’s previous stance, when it repeatedly asserted interest in Greece’s largest port, a substantial part of which it already operates. In March, deputy managing director Ken Chan said the firm had been preparing bidding documents and waiting for the local authorities to call for their submission.
Privatisation of PPA, controlled by the Hellenic Republic Asset Development Fund (HRADF), was launched in March last year, as part of a massive state assets sell-off to relieve Greece’s credit crunch.
The portfolio contains a wide array of assets, including a container terminal, car terminal and cruise terminal, ship-repair facilities and a passenger terminal that is the largest in Europe.
Both Qiu and Chan on Thursday cited the degree of diversification as a reason why Cosco Pacific was taking a back seat in the bidding.
“Our strong-suit is in handling container cargoes,” Chan said. “We don’t really have expertise in the other types of terminals in the privatisation project.”
Under a 30-year concession plan, Cosco Pacific, the world’s fifth-largest port operator by throughput, runs Pier II in the Piraeus Container Terminal (PCT), and is investing €230 million to upgrade Pier III. The terminal has seen double-digit volume growth every year since opening in 2010. Last year, PCT generated US$29 million in profit for Cosco Pacific, while the concession fees from Cosco Pacific accounted for 35 per cent of PPA’s revenue.
Cosco and five other companies registered their interest in the sale of a majority stake in PPA with HRADF in April last year, with Cosco widely seen as the preferred bidder due to Cosco Pacific’s foothold and close ties between Beijing and Athens.
But the port project has stalled, as Greece’s government wrestles with Brussels over the conditions for financial aid.
In the latest turn in an increasingly convoluted process, HRADF has approved the privatisation, but downsized the stake for sale to 51 per cent from 67 per cent, according to Greek newspaper To Vima.
When asked about those developments, Qiu said Cosco Pacific was not always kept in the loop. “The parent group has hired a team of advisers who are communicating with local government,” he said. “We are not necessarily updated.”
