UPDATE: New Greek government halts Piraeus port sale to China’s Cosco Group

UPDATE: New Greek government halts Piraeus port sale to China’s Cosco Group
The Piraeus Port Authority looks set to be finally sold off

Greece’s newly elected government, a coalition formed by the left-wing Syriza and the right-wing Independent Greeks party, has begun its programme of anti-austerity measures by halting the privatisation of the country’s biggest port, Piraeus.

However, within days of the announcement, speculation abounded over whether the Greek stance would soften, with Chinese commerce ministry spokesperson, Shen Danyang saying: “We plan to ask the Greek government to protect the rights and the legal interests of Chinese companies in Greece, including Cosco.”

The sale of a 67% stake in the Piraeus Port Authority (PPA) to China’s Cosco Group and four other suitors, agreed under Greece’s international bailout deal, had been stopped according to initial reports.

Thodoris Dritsas, the deputy minister in charge of the shipping portfolio, said on Tuesday: “The public character of Piraeus port will be maintained. The privatisation stops right here, right now,” adding that “the entire local community opposes this [privatisation] plan”. He also told Reuters: “The Cosco deal will be reviewed to the benefit of the Greek people.”

Cosco operate two of three container terminals at the port including Piraeus Container Terminal (PCT) which handled almost 3m teu in 2014, an 18.5% increase on the previous year, while the terminal operated by Piraeus Port Authority handled 600,000-700,000 teu.

An anonymous PPA source has told CM that the government’s decisions “do not affect the concession agreement” between PPA and Cosco under which the Chinese company hold a 35-year concession for Piers II and III; a view confirmed by a PCT official who spoke to ChinaDaily.

Although Dritsas stated: “Greek people are connected with relations of friendship and solidarity with the Chinese people,” the Greek state’s actions have the potential to rankle the Chinese government, whose premier, Li Keqiang, had celebrated increased ties with Greece as recently as last week.

Keqiang, the premier of China’s State Council, hailed the pair’s “growing political mutual trust” at an inauguration event for the expansion of Pier III of PCT, attended by Greece’s then prime minister Antonis Samaras.

A message from Keqiang was read out at the occasion, saying: “Our co-operation on the Piraeus port, in particular, has set a fine example. When I was in Greece in June 2014, I made a point of visiting the port and recognized that such win-win co-operation indeed brings benefits to both nations. I deeply appreciate that prime minister Samaras has attached great importance to our bilateral relations and made tremendous efforts in supporting the PCT project.”

He added: “I wish to reiterate that China highly values its relations with Greece and hopes that through joint efforts with Greece, the Piraeus port will be turned into a first class port in the Mediterranean Sea and a vital hub of the region, and on that basis, the building of the China-Europe Land-Sea Express Line will be accelerated. By so doing, we will move China-Greece practical cooperation steadily forward and deliver even greater benefits to our two countries and peoples.”

On Wednesday, Chinese Foreign Ministry spokesperson Hua Chunying, said: “We have noticed the reports, and are checking with Greece about the issue.”

While Greece’s second biggest port in Thessaloniki, is also slated to be sold under the Mediterranean nation’s €240bn (US$272bn) bailout agreement, Syriza, the majority coalition partner in government, had pledged to halt the sale of state assets in its election campaign.

New finance minister, Yanis Varoufakis, has described the country’s bailout conditions as “fiscal waterboarding”.

Piraeus was ranked at number 43 on CM’s World Top Container Ports 2014, having handled 3.2m teu in the previous year.