By David Glass, Seatrade Maritime
Cosco-managed and owned Piraeus Port Authority (PPA) has emerged as a “must stop” for any Chinese delegation considering an investment or business move in the Greece. And there are many.
Since the taking over of PPA’s management in August 2016 along with the purchase of a majority stake in the previously state-owned and managed port, the Cosco-appointed leadership under ceo Fu Chenggiu has received dozens of business delegations from China and has become a key plank of the Athens government’s efforts to attract foreign investments.
An outgoing personality Fu has also created a relationship with the Greek leadership, and Prime Minister, Alexis Tsipras. Currently, among would-be Chinese investors considering a foray into the Greek market include, a major construction company, conglomerate Fosun, Air China – which recently inaugurated a direct Athens-Beijing-Athens route – the China Development Bank, which is eyeing the opening of a branch in Athens, a number of China-based tour operators, energy corporations and high-flying e-retailer Alibaba. and even individual real estate investors.All have had meeting with the port authorities’ executives, as have a number of individual real estate investors.
Shanghai-based Cosco’s subsidiaries are also considering possible investments affiliated with the shipping sector, with Cosco Shipyards closely following developments in Greece’s troubled shipyards and repairs sector – as the majority of units are located within a short sailing distance of Piraeus port, and Cosco’s booming container terminals.
Questions arise about Cosco’s overall experience in doing business in recession-battered Greece, and then extend into details, such as the tax regime, Greece’s bureaucracy and labour issues as organised labour movements and a relevant framework, are minimal or non-existent in China.Another concern, is the capital controls regime in the country as Chinese delegations often broach the risk of their capital being “trapped” in Greece.
Currently, ahead of the submission and ratification of a master plan by PPA to the relevant shipping ministry, the PPA is pushing through with new or maturing investments worth EUR63m. A floating dry dock able to service vessels of up to 80,000 dwt has already been ordered from China for positioning in the ship repair zone of Perama, between the main passenger port and Cosco’s container and car terminals.
Fosen, is part of a consortium comprising Greek shipowner/businessman Spiros Latsis’ Lamda Development and and Turkey’s Dogus, signed a 99-year lease with the state in 2014 for the 620-hectare plot on which the Athens airport was located at the and has submitted a EUR8bn plan to turn the site into one of Europe’s biggest coastal resorts creating thousands of jobs, but the project has faced legal obstacle after legal obstacle.
Meanwhile, PPA’s legal counsel, Iphigenia Vourdoumi has warned the Greek parliament Greece is in danger of a violation of the terms of the contract for the Cosco concession of the PPA.
During a discussion of a ‘catch-all’ bill tabled by the Shipping and Island Policy Ministry, she expressed concerns about an article covering the ports waste management.She contends an article dealing with waste management “substantially violates” the concession agreement between the Cosco-controlled PPA and the Greek state.
In particular, she argued the PPA’s right to either manage the waste itself or to sublet it has already been settled in the concession contract and has even referred to a specific provision, which states “it is not permissible to change the terms of the contract by legislation”.Vourdoumi also warned if the PPA is not explicitly excluded or if the provision is not withdrawn, the PPA will have a “right to compensation”.