Piraeus port U-turn will not hurt China investment: analysts

The shipping containers emblazoned with the COSCO logo on the quayside at Greece’s biggest port Piraeus are a sign that China has invested heavily here.

Even though Greece’s new left-wing government set alarm bells ringing in Beijing when it halted the privatization of the port this week, analysts say Athens is merely posturing.

China will still be a «privileged partner for Greece», they say.

COSCO, through its Piraeus Container Terminal (PCT) arm, manages the two main container terminals at the port – one of Europes busiest – under a 35-year concession signed in 2008.

In a logical move to extend its control, the Chinese shipping giant was one of the bidders for the 67-percent share in the port authority held by the Greek state.

The tender deal was one of the key requirements of the 240-billion-euro EU-IMF bailout for Greece.

Winning the bid would have given COSCO complete control of the port, including its passenger ferry functions used by millions of tourists every year heading for the picturesque Greek islands.

Just days before the general election, then-prime minister Antonis Samaras chose the port of Piraeus as one of the showpiece stops in his campaign to return his conservative New Democracy party to power.

Surrounded by visiting Chinese officials, Samaras launched construction work on a third container terminal, a 230-million-euro ($260-million) investment by COSCO.

Visiting Piraeus in June last year, Chinese Premier Li Keqiang said the port could become «a Chinese gateway to Europe».

But radical Prime Minister Alexis Tsipras’s SYRIZA party had barely taken power on Tuesday when it announced it would fulfil its campaign pledge to halt the privatisation of the port of Piraeus and the smaller but still important Thessaloniki docks.

Keeping the port’s management in state hands was «a strategic move to reconstruct the country’s productive apparatus», the new government said.

During the election campaign, SYRIZA lawmaker Theodoris Dritsas had said «the state control of the ports is one of the conditions of this reconstruction».

Dritsas is now alternate minister of the merchant marine in the new government.

China made no secret of its displeasure at the move. «We are highly concerned about this,» Beijing’s commerce ministry spokesman Shen Danyang said on Thursday, calling on Athens «to protect the legal rights and interests of Chinese companies in Greece, including COSCO».

Tsipras’ government has been somewhat evasive since its initial announcement, with Dritsas speaking of a «revision of the agreements with COSCO» and of «open horizons» for future cooperation with China.

But analysts note that posturing aside, the new Greek government is unlikely to try to dislodge China from Piraeus.

“From a legal point of view, I can’t see how they can go back on contracts signed with COSCO, given the size of this investment, which is the biggest in Greece in recent years,» said George Xiradakis, a consultant in the merchant marine sector.

He said COSCO’s involvement has helped lift Piraeus out of its «lethargy» and has «put it on the map in Europe as an essential thoroughfare from North to South».

“China will remain a privileged partner for Greece,» added a maritime sector specialist who declined to be named.

On the COSCO-run dock, new cranes were installed to speed up the unloading of containers.

The Samaras government had regularly stressed that container traffic in Piraeus had increased eight-fold since the lease was signed in 2008, under a previous conservative government.

However, the mayor of Piraeus had expressed misgivings about an all-out sale of the port, and there had been concerns that the European Union would have found it difficult to accept a Chinese monopoly on the running of the port.

Local unionists are also relieved that the tender was called off, mindful of working conditions on the COSCO-run docks.

In July, around 150 COSCO employees had gone on strike to protest over low wages and unclear employment rules.

“OLP and COSCO employees work under different conditions, even though their respective docks are «a few hundred metres apart,» said the head of the federation of Greek port employees (OMYLE), Giorgos Georgakopoulos.

[AFP]