Cosco Shipping has asked Greece to hand it another 16% of the share capital of Piraeus Port Authority (OLP), in which it already holds a 51% stake, citing Greek authorities’ delays in the licensing of the investments the 2016 concession contract provides for.
In a 21-page letter, dated November 23 and addressed to state privatization fund TAIPED, Cosco blames the Greek authorities for the fact that many of the mandatory investments provided by the OLP share transaction contract have not proceeded.
The contract dictated that Cosco would first get a 51% stake in OLP and that five years later it would collect another 16%, on the condition it had implemented the investments foreseen.
In the first three years after the privatization of OLP, when SYRIZA was in office, little progress was recorded in approving the necessary investments. When New Democracy took over in mid-2019, it took some time to examine a number of details, while Cosco added a new project to its master plan, a fourth container terminal at Piraeus Port, which has not been approved as it has run into multiple reactions and is seen as requiring more consultation.
Most of the other investments in the master plan were approved in the fall of 2019. However, one year on, many partial permits and approvals, such as those for environmental studies, have not proceeded, so the necessary presidential decree has yet to be issued.
Already, since the start of 2020, Cosco has been in talks with TAIPED, asking for the concession of the 16% stake, foreseeing that the timely completion of the investments required was practically impossible, even if the licensing process had been sped up.
The OLP concession contract signed between the state and Cosco in 2016 includes clear terms regarding each side’s obligations. With less than nine months left until August 11, 2021, when the five years will be up, it seems clear that the two sides need to reach a compromise to avert a rift. Independent observers argue that the situation will end up either in long negotiations between the two sides or the legal procedures the contract provides for.
Other sources believe that Cosco is putting on the pressure in order to have OLP’s fourth container terminal licensed.