Greece reduces stake of Piraeus Port Authority up for sale

Greece reduces stake of Piraeus Port Authority up for sale
Piraeus is Greece's largest and busiest container port

The Greek government has revised down the stake for sale in Piraeus Port Authority from 67.7% to 51% according to industry sources.

A new tender offer was scheduled to be sent to shortlisted bidders by the middle of this week. The management of ferry services will not be included in the offer, said Bloomberg sources.

Although the privatisation has not yet been officially announced, workers at the port are taking part in a 24-hour strike today to protest against the plans.

Industry sources believe that China Cosco Pacific Co. is the favourite in the race to win the tender among a shortlist of buyers that includes the likes of APM Terminals and Philippines-based terminal operator International Container Terminal Services, Inc (ICTSI).

Greek Prime Minister Alexis Tsipras spoke to Chinese Premier Li Keqiang on the telephone on April 15 about Piraeus and the Chinese Foreign Minstry said in a statement: “Greece is willing to become a strategic cooperative partner of China in Europe.”

An industry source told CM that he believed the sale of 51% will go ahead, with some minor changes but that the Greek government wants increased and broader co-operation with China, in return for selling the port to Cosco.

In parliament on Monday (5 May), Greece’s minister for the economy, infrastructure, shipping and tourism, Giorgos Stathakis, said that talks were underway with Cosco but stressed that these talks are focusing on the two container terminals the company already operates in the port of Piraeus, not the new proposed privatisation.

“Our policy is clear and aims at maximising the benefits of the Greek state. Negotiations with Cosco are underway so that we can find solutions which will form a modern management model for all Greek ports,” he said.

Stathakis added that talks with Cosco were taking place simultaneously with negotiations with  European institutions and in the framework of a “multilateral geopolitical economic strategy.”

A Greek official told The Wall Street Journal that the sale should yield “slightly below” the minimum €500 million (US$563 million) that was expected if the 67.7% stake was up for sale.

The privatisation of Piraeus Port Authority had been in doubt for some time following left wing party, Syriza’s electoral victory earlier this year.

However, even hardliner Thodoris Dritsas, Greece’s alternate shipping minister, who had renounced the privatisation within days of  the election, has conceded that the process will proceed.

He recently stated that no interest has been expressed in any other port authorities than Piraeus and Thessaloniki.

Greece has come under pressure to sell state assets in order to help finance a new bail-out deal with the EU, the International Monetary Fund (IMF) and the Europe Central Bank (ECB).