The Greek Government has announced it would sell part of the shares it owns in the country’s most important ports so that the contractor would invest in the modernisation of port facilities, in need of capital repairs for years. The moment, specialists say, is not favourable, since the economic downturn, which made traffic in ports go down, has also dropped the value of shares of these ports and has attracted critics saying the Greek ports would be sold for nothing. The problem is that the maritime sector has the highest contribution, after tourism, to the gross domestic product of the Hellenic State. The Government motivates their decision by saying that, given the lack of investment in port facilities, ports such as Piraeus or Thessaloniki might lose their importance. The Hellenic State has recently launched a strategy for transforming the main ports into logistics gates, a new concept aimed at maintaining the Greek influence on the maritime transport market.
The problems of Greek ports are considered of national interest and are always attracting energies beyond the economic area. The naval system is considered a national good and a reason of pride for every Greek citizen. The decision to reform the naval system, given the descendent evolution of incomes and port traffic, has come to the attention of the media and the citizens, the problem being treated with maximum of care by every Government in the country. It is well known that success in naval transportation can ensure a new mandate, while a failure equals the end of the political career.
Sea container transport, international market liberalisation, the accession of new players from emerging countries (China, India, Brazil etc), the growing importance of environment protection, global threats, such as terrorism, have generated a major change on the maritime market and have determined a reorganisation of the ports’ role in this new context.
The Greek ports, traditionally seen as gates towards the goods coming from abroad, especially from remote countries (China is the most important foreign customer for Greek maritime carriers), have been replaced by the logistics knots which create bridges between the freight coming from land and where the other means of transport, which take over the goods arrived by ships, as well as the freight handling system, become as important as sea transport. The Greek ports have been confronting with a new reality in which investments in the automation of operations and port facility modernisation are essential to keep up with the every day more fragmented market and with the increasing number of large competitors.
To adapt to new requirements and maintain the leader position on the market, Greece has adopted an aggressive policy in port development, taking advantage of every opportunity on the international trade market. The EU expansion in Eastern Europe, the economic boom of Arab countries, such as the United Arab Emirates or Saudi Arabia and the new geopolitical context of the Black Sea have determined a new transformation of Greek ports into intermodal knots in the Mediterranean and the Black Sea Basin, the ports of Piraeus and Thessaloniki becoming the main access gates towards Europe for the goods coming from Middle East and North-Eastern Africa.
The descentralisation and stimulation of port competition helped port traffic increase
Restructuration consisted in the initiation of a descentralisation process of port authority, the management system being complex, with 12 maritime regional authorities, 39 offices providing supervision services from the state and 32 authorities representing the municipalities which manage the ports. Aside from an overall 500 ports, the post important of which are Piraeus, Thessaloniki, Alexandroupolis, Elefsina, Heraklion, Igoumenitsa, Kavala, Kerkyra, Lavrio, Patras, Rafina and Volos, there are over 100 private ports in Greece.
Another reform element was stimulating port competition, which encouraged the authorities of each port to attract private investments. Therefore, the port of Thessaloniki has headed more towards the Black Sea trade once the traffic from Central Asia and the Caspian Sea increased.
Greece owns 74% of the ports of Piraeus and Thessaloniki, two of the most important ports in the Mediterranean Basin. Selling them was an older decision made before the economic downturn. Analysts say the moment to carry on privatisation is not favourable, which was, in fact, refuted by the share growth the moment when the state has officially announced that on June 2 it would sell the majority package of shares. The shares of the port of Piraeus have increased by 42% since the beginning of the year. Part of the port is managed by the Chinese company Cosco Pacific which has taken over 2 of the port’s 3 naval platforms. In May 2010, a Chinese delegation of the Cosco Pacific’s group, China Ocean Shipping Company, headed by CEO Wei Jaifu, visited Greece and met the country’s President , Karolos Papoulyas. They discussed the 100% takeover of the port of Piraeus and the partial takeover of the port of Thessaloniki. Jaifu declared that he wanted Piraeus to become the most important Mediterranean port and that China would provide investments for serving this objective which includes 800,000 sea transports in 2010.
The Greek port development master-plan for 2006-2015 includes EUR 6 Billion investments, plus EUR 3 Billion European loans on a repayment period of 25 years.
by Alin Lupulescu
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