Piraeus port an appealing investment for foreigners

A number of international giants in the areas of seaborne transport and port management, such as China’s Cosco, Italy’s MSC, Denmark’s Maersk, Saudi Arabia’s Dubai Ports World and Israel’s ZIM, have all expressed interest in investing in commercial Greek ports, with their targets including boosting container transit and upgrading the quality of and expanding current port services. Recently, Maersk officials repeated their interest in the Port of Piraeus, noting however that they would wait for a fresh tender procedure to be announced. The tender, according to reports, may include certain changes in the requirements envisaged to bar the emergence of monopolies, which would otherwise have a negative impact on treating all of the interested companies on an equal footing. Wei Jiafu, president of state-owned China Ocean Shipping Group Co (Cosco), is reported to have sent a letter to Prime Minister Costas Karamanlis, asking for the opening of privatization procedures for the country’s two largest ports. Jiafu is said to have reiterated in his letter a Cosco proposal for investing in the Piraeus port, with regard to both the container station and land areas to be used for assembly operations of electrical appliances. China has repeatedly underlined its interest in the Piraeus port, wishing to transform it into a transit hub for Chinese products destined for the Balkans and the rest of Europe. On the other hand, Italian-Swiss MSC, which has signed a contract with Piraeus Port Authority (OLP) and currently handles 70 percent of the port’s container operations, has announced it would use the rights it has now gained in the port, despite its contract having been disputed by the Competition Commission. The commission is expected to issue a verdict by the end of the year and this could be critical for the future of the port’s privatization process. Officials from ZIM, one of the largest container shipping companies in the world, have been making certain plans, insisting on their intention to raise container operations in the port of Piraeus by 100,000 containers on an annual basis. The Israelis have made it clear in a number of ways that their presence in Piraeus is imperative, given that they have been using the port in recent years as a second central port in cases of hostilities or industrial action taking place in their region. The Piraeus Container Station (SEMPO) is seen as a fine investment by a number of foreign investors. The station contributes 75 percent to PPA’s turnover and 50 percent to earnings before interest, taxes, depreciation and amortization (EBITDA). The station’s current annual handling capacity stands at approximately 1.5 million TEU (20-foot equivalent units), but this would be raised to 4.5 million TEU under an eight-year investment plan, valued at -400 million. Most of the container operations at Piraeus port are currently taking place at Pier II, but construction of Pier I, currently under way, is expected to raise capacity. An updated business plan for the container station includes the completion of the Pier I infrastructure, to be equipped with advanced container loading-unloading and stacking machinery to enable facilities to serve new-generation vessels of capacities of over 10,000 TEU. The plan also provides for the construction of a third pier, Pier III, valued at -450 million. The time schedule for the above projects is especially demanding, providing for the conclusion and full operation of the station by the year 2014. In addition, construction of a new railway station to be located within the port is expected to conclude in the early days of next year.