Huge investment promised after China takes majority stake in Greek port

The sale of a majority stake in Greece's biggest port, Piraeus, has been a successful privatization and is the first step toward a long path of China-Greece collaboration, says Stergios Pitsiorlas, head of Greece's privatization agency the Hellenic Republic Asset Development Fund.

Pitsiorlas emphasised the significance of the deal in a recent interview with China Daily, and explained the port's future development goals. He also said there are substantial common interests between the two countries.

China's COSCO Shipping Corporation, which owns the world's fourth-largest container fleet, formally took over Piraeus Port in August, after acquiring 51 percent shareholding for 280.5 million euros ($311.5 million; 254 million).

Cosco will increase its stake to 67 percent after five years if certain conditions, including the successful completion of mandatory investments up to 300 million euros, are fulfilled, HRADF said.

Pitsiorlas said the Greece had secured a high price, an important investment program and the creation of many new jobs.

"Above all, it has laid the foundation for Piraeus to become the biggest port in the Mediterranean under COSCO's management, along with everything else entailed for the Greek economy," he said.

Greece has been accelerating privatization of infrastructure projects in recent years, aiming to boost its sluggish economy and create jobs by attracting more investment.

Piraeus, near the capital Athens, is the de facto base of Greece's shipping industry and one of the largest ports in the Mediterranean.

COSCO uses Piraeus as a transshipment hub for Asian exports to Europe arriving on container vessels from China, as it is the nearest western port to Suez Canal.

COSCO, which has been managing two of Piraeus' cargo piers through its Greek unit, Piraeus Container Terminal S. A. since 2009, has boosted the port's competitiveness.

The port's container throughput stood at 3.36 million 20-foot equivalent units (TEUs) last year, up from 880,000 TEUs in 2010.

Given the strategic importance of Piraeus' geographic location for the international transport, Pitsiorlas said the port can become China's and the rest of Asia's gateway to Europe, the biggest ship repair base in the Mediterranean, and the center of cruising in the Mediterranean under COSCO's management.

"COSCO will be able to utilize these benefits and, as far as I am aware of, it has already prepared its required investment program in order for all port's potential to be advanced," he said.

In July, COSCO said it would invest up to 500 million euros in Piraeus Port to upgrade cruise and shipping container facilities.

A new docking space for cruise ships was launched at Aghios Nikolaos in Piraeus on Oct 3. COSCO Chairman Xu Lirong said during the opening ceremony that COSCO aims to increase the movement of cruise passengers to 1.5 million from the current 1 million a year in the short term and 3 million in the longer term.

"The Greek State, from its side, has ensured the funding of the extension of the cruise pier with about 100 million euros, which will be a great help", Pitsiorlas said.

According to a report from the Greek think tank Foundation for Economic and Industrial Research, within five years of privatization Piraeus will attract 500 million euros of investment from other businesses and will create more than 30,000 jobs by 2025.

"The collaboration in Piraeus is the first step on a path, which could be very long," said Pitsiorlas, adding that there are substantial common interests between China and Greece regarding the role that Greece can play in the framework of the One Belt and One Road Initiative that China has proposed.

"Greece can become a bridge between China and Europe from a geographical, a historical and a cultural point of view," he said.

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