Greece to seek increased Chinese investments in port projects

Greece to seek increased Chinese investments in port projects

ATHENS is looking forward to an immediate increase in Chinese direct investments in Greece and attributes great significance to the contacts to be made in Beijing during the Belt and Road Forum to be held in Beijing between May 14-6.

08 May 2017 - 20:00 - Update: 08 May 2017 - 22:56

At least 28 heads of state have already said they will attend the forum, hosted by Chinese President Xi Jinping, which will focus on the coordination of policies, the development of infrastructures, the promotion of trade and economic cooperation between China and other countries.

The strong Greek delegation will be led by Prime Minister, Alexis Tsipras. Talks between Athens and Beijing over an extensive long-term economic cooperation agreement have been going on for some three years and are at an advanced stage.

A pact, which is expected to include not only a number of specific investment initiatives but also a financing mechanism, is scheduled to be signed during the Forum for International Cooperation, in the context of the One Belt One Road Initiative.

The agreement is being prepared by Greece's deputy Economy minister, Stergios Pitsiorlas in cooperation with the Greek PM's office, along with the Chinese embassy in Athens. According to available information, the deal will have a three-year horizon and its potential value is in the billions.

Among the projects seen to be of common interest is the creation of a funding mechanism, a major cooperation for the participation of a large Chinese group to invest in port and shipping activity, a Greek tourism complex, a key project in the telecommunications and energy sectors.

Sources say that more than 10 such business plans have already been evaluated and put forward for ratification.

Mr Pitsiorlas is well known to the Chinese and to President Xi, having previously headed up the Greek state's privatisation agency, Taiped, overseeing the sale of a majority stake in the Piraeus Port Authority (PPA) to China's Cosco, which has assumed management of the port authority.

He has also been touting Cosco's perceived intent to enter Greece's shipbuilding and shiprepair sector, most recently during a meeting with members of the Piraeus Chamber of Commerce.

Mr Pitsiorlas cited Cosco's interest in Greece's second largest shipyard, Elefsis, and its 70 per cent owner Neorion Holdings, which is 100 per cent owner of Shipbuilding & Industrial Enterprises Syros, the country's third yard. Both of the industrial conglomerates are struggling amid the increasingly cut-throat competition characterising the shipyard sector.

In terms of the Neorion shipyard on the Cyclades island of Syros, analysts say the key to a successful deal is a three-way agreement between the main creditors, Greece's Alpha Bank, the Greek state and the buyer, with Cosco to the fore.

Cosco has made no secret of its wish to have a major shiprepair base in Greece and has also previously expressed interest in the country's largest facility, Hellenic Shipyards.

Management of the Cosco-operated port authority has unveiled a detailed plan to upgrade port facilities and shiprepair capacity, including placement of an 80,000-tonne floating dock. However, the purchase and placement of a mammoth 300,000-tonne floating dock in the greater Piraeus maritime area depends on developments at the two major shipyards.

Piraeus' goal is to become the biggest container port in the Mediterranean within two years, moving up from third at present. Currently 3.67 million TEU are handled annually, behind Spain's Algeciras, with 4.76 million TEU, and Valencia, 4.72 million TEU.

Target for 2018 is to reach second place, says Anastasios Vamvakidis, commercial manager of the Piraeus Container Terminal (PCT), which is controlled by Cosco, according to Seatrade Maritime New of Colchester.

Mr Vamvakidis said next up for the Shanghai-based group is the establishment of a logistics centre within PPA to further boost Piraeus' lure as the southeast gateway into the EU, complete with a direct rail line linking Piraeus to the rest of Europe.




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