Port concessions seen a must for modernization

Report supports global operators

The government’s decision to allow the entry of private operators into the container terminals of the ports of Piraeus and Thessaloniki is in the right direction, as the two facilities have lost much of their competitiveness in the last few years and must now cover considerable ground, a study by Alpha Bank said.

The report also notes that Greek ports no longer compete with other independent facilities but with global operators who each manage a large number of terminals.

On Monday, the government opened the only two bids for the Piraeus container terminal, submitted by two of the world’s largest operators, China’s Cosco Pacific and Hutchison Port Holdings. The two manage a combined total of 65 ports worldwide.

The government has said the concessions are necessary to infuse much needed capital in the facilities and improve their potential.

Protesting dockers in the two ports, who fear their jobs may be at risk, have refused to work overtime for the last five months, causing severe disruption in the normal flow of both imports and exports.

The report argues that Greek ports lag in organizational structure and capacity and the government was right to seek world-class operators who possess the know-how and business links required to carry out the necessary investment and the provision of a wide array of services.

“It is a model applied widely abroad – 150 large ports worldwide have conceded terminals or activities to private companies, while the world’s largest port operators control more than 35 terminal stations in Europe, many of which directly compete with Piraeus. (The concession) will allow ownership to be retained by the port authorities of Piraeus and Thessaloniki (OLP and OLTH), the creation of new jobs, revenue for the government, while the operator will be obliged to offer competitive rates and high-standard services in order to attract cargo, with considerable benefits for both imported and exported goods,” the Alpha Bank report argues.

China Ocean Shipping Group Co, known as Cosco, DP World Ltd, and Hutchison Port Holdings have submitted bids to take over container operations at Thessaloniki Port Authority, Greece’s second-largest port.

Cosco Pacific Ltd, Dubai-based DP World, and Hong Kong-based Hutchison delivered bids to the Thessaloniki Port Authority, Greece’s Merchant Marine Minister George Voulgarakis said in an e-mailed press release today. The deadline for the bids was yesterday.

The interest shown by the three companies “surpasses the most optimistic expectations,” Voulgarakis said in the statement. All three “have long experience and a huge market share in the global ports industry.”

Construction group Hellenic Technodomiki’s affiliate Aktor, and Piraeus Bank will partner Dubai, which is bidding through its P&O unit, Thessaloniki port said in a later bourse filing. Hutchison has joined for its bid with Alapis, its partner in the Piraeus port bid.

The port at Thessaloniki is seen as a key transshipment hub for the Balkans. Greece plans to choose private managers for container operations by July and will sign concession contracts by the end of the year, the government said last month. The workers have called a 24-hour strike for tomorrow. (Bloomberg)