Mixed messages from Greek government on Piraeus privatisation

Mixed messages from Greek government on Piraeus privatisation
The Piraeus Port Authority looks set to be finally sold off

Confusion reigns in Greece on whether the new government will block the privatisation of the Piraeus Port.

The government, a coalition formed by the left-wing Syriza and the right-wing Independent Greeks party, was elected promising to halt austerity measures and the sell-off of the Piraeus Port company to interested parties including China’s Cosco.

In January, this was still the government’s position. Theodoris Dritsas, the deputy minister of shipping, said on January 27: “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”.

Then, in an apparent U-turn on February 23, the government wrote a letter to leaders of the Eurozone, which said the government would not reverse ongoing or completed privatisations. This promise was made in return for an extension of the country’s bailout and CM’s Greek industry sources assumed that it meant the sell-off was on.

However, two days later on February 25, the Greek economy minister George Stahatiks said: “We will cancel the privatisation of the Piraeus port. It will remain permanently under state majority holding. There is no good reason to turn it into a private monopoly, as we made clear from the first day.”

This plunged our industry sources back into uncertainty and the Greek Port Union (OMYLE) issued a circular “demanding” that the Government takes a clear cut position on the matter.  At the time CM went to press, the situation was still unclear.

Cosco currently 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 container terminal operated by Piraeus Port Authority handled 600,000-700,000 teu.

As well as Eurozone leaders, China has pressured Greece not to stop the sell-off. Chinese commerce ministry spokesperson, Shen Danyang said on January 29: “We plan to ask the Greek government to protect the rights and the legal interests of Chinese companies in Greece, including Cosco.”

According to CM’s World Top 120 Container Ports, Piraeus was the 43rd biggest container port in the world in 2013, handling 3.2m teu.

The sale of the country’s 67% stake in the smaller port of Thessaloniki port is in the same situation as the Piraeus sell-off. Eight investors have qualified for the next stage of the tender process.