In Hellenic Shipping News 13/05/2015
With port workers striking late last week, as a first means of opposition to the planned privatization of the port of Piraeus, Hellas’ largest port and one of the 10 biggest in terms of container throughput in Europe, the government appears engaged in discussions with both the EU lenders, as well as the main interested parties looking to place a binding bid for a majority stake in the port of Piraeus.
The Greek government is renegotiating the terms under which Piraeus port will be sold to Chinese Cosco, Shipping and Tourism Minister Giorgos Stathakis said last week in parliament. Yesterday, the Hellenic Privatization Fund confirmed that the government plans to offer winner of 51% stake in Greece’s biggest port an extra 16% in five years, something which will be conditional on a series of key dates and steps which the bidder will assume, in terms of completing promised investments among others. The country’s privatization agency has agreed to sweeten the offer to include an additional 16% to be awarded to the winning bidder in four, equal tranches over the next five years, conditional on investment commitments from the bidder, according to official statements in various media outlets. After paying for the 51% stake, the winning bidder would be required to make payment for the remainder as each new tranche is approved.
Initially, the tendering process called for the sale of a stake of 67% to interested parties, together with the promise of major investments to boost the port’s infrastructure and quality of services. The previous government’s target called for an investment programme of around 500 million euros, with the commitment of not raising rates for coastal shipping services, which is a socially sensitive matter, given that costs are needed to be kept low in order to permit for the connection of the country’s numerous islands to the mainland.
According to market sources and people with direct knowledge of the deal (as mentioned by Wall Street Journal), it is expected that both of the two main contenders for the port will submit a binding offer for the port of Piraeus. Those are China’s Cosco Holding Co., a division of the Chinese conglomerate, who is also present in the port through the handling of container terminal Piers II and III, as well as APM Terminals, the ports handling division of Denmark’s shipping giant of A.P. Moller Maersk. Other bidders include Ports America Inc., the biggest U.S. port operator, Philippines-based port operator International Container Services Inc. and Utilico Investment Ltd., a private investor based in Bermuda.
