Greece Approves Cosco's Bid for Port of Piraeus

Published Feb 19, 2016 11:27 AM by The Maritime Executive

As Greek dockworkers continued a 48-hour strike protesting the privatization of the port of Piraeus, the nation’s largest, the Hellenic Republic Asset Development Fund (TAIPED) announced that it had approved sole bidder Cosco's application for a 40-year, 67 percent stake in the port.

The fund approved Cosco's proposed price of $410 million and declared the Chinese firm the preferred bidder. Cosco has been an investor in Piraeus for seven years and plans to use the port as its Mediterranean hub.

As part of the deal, Cosco has agreed to invest an additional $350 million in the port over the span of the next ten years. Greece's Foundation for Economic and Industrial Research found that the development plan will bring in $5.5 billion each year to the economy, adding 125,000 jobs.

"It is a win-win situation despite what skeptics says," said Ioannis Tzoannos, former general secretary of the Greek shipping ministry, speaking to Chinese media.

Not all agree. “These privatizations will be catastrophic for Greece. None of the income that is earned from the privatizations enters the economy. It is instead earmarked for the repayment of interest and the debt, required by law to be transferred within 10 days to a special account used exclusively for the repayment of the national debt,” said economist Dimitris Karousos, speaking to Truthout.

The plans to sell the ports, stalled when a leftist government took power early last year, was reactivated after Athens signed up to a third E.U. bailout last summer, and the controversial privatization has generated multiple rounds of strikes.

The sale is strongly opposed by port workers who fear job cuts and higher export cost for Greek products. About 500 dockworkers gathered on Tuesday outside the entrance of Piraeus port's sole cargo pier in Athens to protest against the plan.

Athens also plans to auction a 67 percent stake in Thessaloniki Port Authority, which operates the country's second largest port. Eight groups were considered for the bidding process in 2014. The Thessaloniki sale has reportedly gained fresh momentum after the Piraeus lease.