“We aim to reach a container throughput of 10 million TEUs so as to become the largest and most efficient logistic hub in Central and Eastern Europe,” Piraeus Port Authority Chairman Yu Zenggang tells Kathimerini in an interview.
Zenggang says that the recent deal with the Greek state – which allowed Cosco to raise its stake in Greece’s biggest port while giving it another five years to complete its investment plan – will give the Chinese shipping group “the opportunity to showcase its potential to go above and beyond the mandatory projects when the conditions are right.”
He also describes the measures implemented by PPA (known in Greece as OLP) to ensure a healthy and safe working environment following the death of a dockworker in an accident at the container terminal last month, while affirming the company’s commitment to meet European Union targets to curb greenhouse gas emissions.
Asked about reactions from local businesses and union groups to the company’s investment in the Perama ship repair zone, Yu says that the company aims to regenerate the Greek ship repair industry, “making Piraeus an attractive destination and a main center for ship repairs in the Mediterranean.”
He says that PPA’s contribution to Greece’s GDP for 2020 amounted to 0.78%, which he expects to grow further, while also discussing Cosco’s initiatives to promote its environmental, social and governance (ESG) agenda.
How much capital has Cosco Shipping invested so far in Piraeus, including in Piraeus Container Terminal SA (SEP)? Not only in investments but also in terms of share acquisitions, payroll, insurance contributions and taxes.
As of 2021, Cosco Shipping Group has made investments exceeding 1 billion euros. With the construction of Pier 2 and Pier 3, the group has made an investment of €600 million, leading to an impressive capacity increase reaching annual container handling of well over 7.2 million TEUs. However, since April 2016, the company has invested €368.5 million in the acquisition of PPA’s 67% majority shareholder stake, while it is noted that the concession agreement involves mandatory investments of €294 million, part of which has already been implemented and exceeds €100 million. In addition, the group has offered more than 3,000 direct jobs to the local community and more than 10,000 jobs in related services, contributing to €1.4 billion in taxes, duties and social security contributions. Ultimately, Cosco Shipping’s direct contribution to the local economy was far more than that, owing to the supply requirements of the group’s fleet. Specifically, since 2010, 3,937 ships have arrived at the port of Piraeus whose needs were covered locally.
Are you satisfied with the general operation and development of Piraeus Port Authority?
The port of Piraeus has been playing an important role in international trade with its inherent potential and value as the gateway to the Mediterranean, connecting the Middle East, the Balkans, Southern Europe and the hinterland of Central and Eastern Europe through land and sea logistics channels as well as the closest hub port to the Suez Canal.
In 2009 Cosco Shipping Group, as a leader in the global shipping industry, was the only enterprise that firmly trusted the value of the port of Piraeus and earnestly participated in the tender and was awarded the concession for Pier 2 and Pier 3 container terminals when no one else in the world bid due to what was the most difficult moment for the Greek economy.
In just a few years, the port has become the leading port in the Mediterranean in terms of container transport. The container port ranking had been improved to 26th in 2020 from 93rd in 2010. Meanwhile, it is one of the largest ports in Europe with integrated business encompassing many activities such as the cruise terminal, ferry terminal and car terminal business, with a significant contribution to the local economy and industry.
What are your next goals?
The port of Piraeus is entering a new era of prosperity with mutual benefits for Greek society and the shareholders. On a long-term basis, by further developing the port, we aim to reach a container throughput of 10 million TEUs so as to become the largest and most efficient logistics hub in Central and Eastern Europe. It is noted that the above development has a main focus and concerns respect for and protection of the environment, alongside safeguarding employee, customer and supplier rights. With the same dedication and high sense of responsibility we will continue our dynamic sustainable growth path, while staying true to our vision of expanding Greece’s Piraeus port into the biggest harbor in Europe and one of the most important ports in the world in environmental, societal and governance terms.
You received a five-year extension to complete the remaining mandatory investments. What makes you think that you won’t run into obstacles in their implementation again?
It is a positive development for all parties involved, both the government and Cosco Shipping, creating significant win-win synergies. On the one hand, with the new deal the government demonstrates its ability for fair treatment of investors, enabling an investor-friendly environment while unlocking necessary projects that positively impact the country’s economy. On the other hand, the new deal gives Cosco Shipping the opportunity to showcase its potential to go above and beyond the mandatory projects when the conditions are right.
We read in your recent report that Piraeus Port Authority is behind 0.78% of the country’s GDP. How can the benefit of Cosco Shipping’s port activity to the Greek economy be further increased?
PPA has proved to be mutually beneficial and has strongly contributed to the economic recovery and social development of Greece in line with the interests of the Greek state and the Greek people. Proof is the fact that the contribution of the listed company to the country’s GDP for 2020 amounted to 0.78%, something that cannot be easily overlooked. However, with the systematic and targeted investments at the port in the coming period, which will further improve the port infrastructure and significantly strengthen its multifaced business potential and activities, Cosco Shipping is clearly expected to benefit the Greek economy to a greater degree.
Many businesses and trade union organizations in the ship repair zone and other sectors have accused you of “displacing” them and threatening their interests. What is your response to that?
The investments in the ship repair zone in Perama are divided into two phases and both are already in full progress. In fact, the first phase involving €31 million has been already finalized, while the second, concerning a planned investment of €24 million, is expected to be completed in the next two and a half years. With this large-scale investment project we are aiming at reviving the Greek ship repair industry, making Piraeus an attractive destination and a main center for ship repairs in the Mediterranean. We are leveraging Cosco Shipping’s global brand awareness to attract international ship repair clientele to Piraeus, alongside accelerating the zone’s potential through infrastructure innovation, environmental sustainability, expansion into new types of ship repairs, increasing volume capacity, and a diversification of revenue sources. Booming ship repairs means substantial returns for local ship repair businesses of all sizes, through new business opportunities and service provision to a much larger and ever-increasing customer pool.
What actions are under way to reduce carbon emissions in the Piraeus port complex? Will you develop production from renewable energy sources? Are procedures in progress for the development of cold ironing for ships that dock in Piraeus?
In recent years, under the Cosco Shipping Group investment and the new PPA management, the necessary investments alongside a great number of projects have been implemented at a fast pace based on a comprehensive plan and a holistic strategy aiming at a complete port upgrade and modernization. A desired modernization, which, however, is being developed with the basic concern being the protection of and respect for the environment but also on the basis of fair and good governance. However, we know very well that our exponential growth in recent years, which is still continuing, can only be sustainable when linked with green development concepts. Therefore, environmental responsibility has evolved for the port of Piraeus into a top strategic priority.
Our prime objective is to minimize the impact of its business operations on the environment. Therefore, we have adopted and implemented a number of initiatives and actions with the aim of minimizing CO2 emissions by using alternative energy sources and implementing the right waste management policies, alongside the minimization of noise and the maintenance of the water quality standards. As a member of the European EcoPorts network, we prepare an annual self-diagnosis report informing all interested stakeholders on the management of crucial environmental issues at the port. In addition, we are implementing a holistic environmental management approach certified by the European Port Environmental Review System (PERS), while we have become an energy producer. More specifically, since 2016 we have been operating a photovoltaic station within the cargo terminal producing 430 KWp of clean energy through sun panels. Alongside the Eco Port status, provided by the leading European environmental network, Piraeus port holds numerous environmental certifications in addition to actively contributing to a series of European environmental projects and initiatives supporting the company’s vision of a green Piraeus port.
Finally, I would like to emphasize the fact that we are embracing Europe’s ambition to be the world’s first net zero emission area by 2050 and take a strategic role in making the European Green Deal happen.
Many citizens of Piraeus are concerned about gradually losing contact with the sea and the natural extension of their city. We recently saw an initiative regarding the development of a playground that addresses some of these concerns. Do you have other similar plans?
In fact, soon we will build a new modern park with cycling paths within the cruise port area which can be enjoyed by the citizens of Piraeus and the neighboring municipalities and of course all visitors. However, as already mentioned, PPA’s management has a holistic strategy in place for the port which not only involves projects and investments but also the provisioning of support to the citizens and local communities, alongside care for the environment and good governance. Within this framework PPA implements on an annual basis a continuous support program addressing weak and vulnerable social groups, the fight against poverty and the promotion of sports, while assisting new generations in their education and other important activities.
In particular, for the years 2019-20, Cosco Shipping Charity Foundation (the charitable fund of Cosco Shipping, the major shareholder of PPA SA) implemented the “Children Included” program in collaboration with the Hellenic Red Cross. More specifically, Cosco Shipping Charity Foundation offered the amount of €500,000 for the support of more than 4,000 children from economically vulnerable families at risk of social exclusion.
In addition, during the period 2018-19, Cosco Shipping Charity Foundation financially supported the Hellenic Paralympic Committee to the tune of €100,000, helping many athletes with disabilities to achieve their goal of participating in the 2022 Winter Olympics. Those initiatives are just a small example and it is noted that in the future the group will systematically continue to support citizens and society in general.
The pandemic stopped international trade, slowing down the growth rate of container traffic at Piraeus for the first time in many years. However, the recovery of trade is now characterized by huge problems in the supply chain. How was Piraeus affected and what role can it play in solving these problems?
PPA would like to express its sincere gratitude to the Greek government for its effective achievements in Covid-19 prevention. PPA SA, with responsibility and commitment, actively participated in the efforts of the Greek state to limit the spread of the coronavirus and in the protection of public and private health, implemented a set of targeted measures in accordance with the decisions and recommendations of the Ministry of Health and National Public Health Organization (EODY), successfully ensuring the health and safety of employees, customers, users of the port and all those who are a key pillar for the development of the business. In particular, since the outbreak of the pandemic in Greece, the company has implemented those policies that were deemed necessary and appropriate in order to ensure business continuity, smooth operation and the reduction of negative consequences to the smallest possible extent.
What measures are you taking to ensure employee safety?
Piraeus Port Authority SA acknowledges the importance of ensuring safe conditions and workplaces for its personnel, as well as safe transportation conditions for all involved parties, customers, passengers etc. Therefore, the company ensures all health and safety conditions for employees and its areas of responsibility. The company alsohas an occupational physician, in accordance with the applicable legislation, whose duties are to provide instructions and advice to the employer, employees and their representatives, in writing or orally, on the measures to be taken for their physical and mental health. PPA SA employs two safety technicians and an occupational physician, who submit their reports to the company’s management. It is also noted that in high accident risk areas (container terminal and ship repair zone), there are two ambulances with trained rescue personnel (two rescuers per vehicle) 24/7 to cover any emergencies. In addition, PPA SA has established an Employee Health and Safety Committee (EHSC) staffed by employees. This has all the powers deriving from the applicable legislation and meets regularly in the presence of the employer’s representatives.