Piraeus Port Privatization Attracts Major Interest

Piraeus Port Privatization Attracts Major Interest


By Lefteris Yallouros – Athens

The privatization of Piraeus, Greece’s largest port, has attracted major investment interest from abroad.

A total of six investment groups submitted expressions of interest in acquiring the 67 pct of share capital in the Piraeus Port Authority (OLP) which is up for grabs from Greece’s Asset Development Fund (TAIPED).

According to an announcement by the Fund, besides China’s Cosco Group whose interest was considered certain, APM Terminals B.V., Cartesian Capital Group LLC, International Container Terminal Services Inc, Ports America Group Holdings and Utilico Emerging Markets Limited also applied to acquire a stake in OLP.

Binding offers for the Port Authority are expected by end of the year. Consultants will evaluate the applications and forward their proposal to TAIPED regarding those candidates who fulfill criteria for participation in the tender’s next phase.

Piraeus is one of Europe’s busiest passenger ports and a major player in the Mediterranean in terms of cargo, handling 3.1 million TEUs in 2013.  OLP’s net profit rose 12 percent to 8 million euros last year, according to company results.

The example of Cosco’s investments in the port of Piraeus so far is encouraging as it subsidiary, COSCO Pacific – the world’s fifth largest container terminal operator currently running two of the state-owned Piraeus port’s piers – succeeded in bringing traffic through sound management to the port. Last year it agreed to invest an extra 230 million euros to boost the port’s handling capacity over seven years. In return, it would stop paying fees to OLP.

Plans to privatize the Piraeus and Thessaloniki ports have, however, met strong opposition by opposition parties and port employees alike. The latter maintain it will have “painful consequences for employees, local communities and critical sectors of the economy, such as tourism, shipping, trade and transports” and have pledged to fight the privatization through industrial action.

Main opposition SYRIZA party has accused the coalition government of attempting to sell off OLP in order to turn the country’s largest port into a private monopoly. Piraeus Mayor Vasilis Michaloliakos (backed by ruling New Democracy to stay in office in May’s local election) has stated “the port’s shared must belong to the Municipality” while the government’s junior coalition partner, PASOK, has raised questions regarding the legal and constitutional implications of OLP’s sale and whether the privatization may clash with EU legislation in the future. The party will also request a report by experts in order to determine whether the sale of shares or concession of port services is in the country’s interest.