The process for the privatization of the Greek ports is seen by the authorities as a chance for economic growth and development and by investors as the accession in a market which facilitates access to Europe. Interested in this opportunity, three economically developed countries are paying attention to the tender calls in order to be able to access the capital of ports and to expand their activity range at the same time.
The main objective of the privatization processes is to limit the role of the state in the economy through the different sectors and to offer an environment that is favourable to the development of the private sector whose role is to add value to the economy by ensuring a much more efficient organisation of investments and administration and by stimulating competitiveness.
Thus, many countries choose to sell their transport companies and the goods transport divisions are more appealing to investors. The authorities have decided to sell ports in order to increase the infrastructure quality and capacity, the volume of freight and to optimise commercial activities.
Ports are known worldwide for their contribution to economic development and growth and they have a vital contribution in the transit and circulation of freight. Go-vernments implement privatisation policies directed to the efficient and productive operation of ports in conformity with market circumstances and in order to stimulate private resources to invest in increasing the capacity of ports.
Greece has thus expressed its intention of selling its ports providing opportunities to both domestic and foreign companies to buy and develop their activities and infrastructure.
This year will be marked by Greece’s effort of privatising its state-owned industry, declared the country’s Minister of Economy Kostis Hatzidakis. Through the privatisation process, the authorities estimated revenues of USD 50 Billion (by 2015), an amount sharply reduced to USD 10 Billion, funds used to stimulate the economic revival and to reduce the level of debts. The privatisation list includes banks, utilities, ports, airports, roads and railways. According to the privatisation agency, Hellenic Republic Asset Development Fund’s –HRADF, the sale process of two companies worth USD 260 Million was completed in 2012, the target set for this period being of over USD 4 Billion. However, the authorities hope to complete most of the privatisation plan this year. “We hope to have a progress with our privatisation plan this year”, declared Hatzidakis. For 2013, the authorities’ estimates on the privatisation process amount to USD 2.6 Billion with investments coming mainly from China and Russia, countries that are interested both in ports and in the national railway company, Trainose, also on the state’s list of sales.
Although Greece is pressed by its financial situation and is thus forced to sell many state-owned companies, European governments are concerned with the participation of non-European countries which could significantly expand their activities in Europe by taking over strategic companies. Such is the case of Russia and China which are very interested in buying Greek ports. China seems to be very interested in the Greek ports especially since the Chinese maritime operator Cosco and the railway operator Trainose develop transport partnerships in the port of Piraeus and, the press says, would be interested in taking over the main north-south railway.
The portfolio of the Greek State consists in 12 ports (as Societé Anonyme), Piraeus (OLP), Thessaloniki (OLTh), Volos, Rafina, Igoumenitsa, Patras, Alexandroupoli, Iraklio, Elefsina, Lavrio, Corfu and Kavala. The state owns a stake of 74% in OLP and OLTh (traded on Athens Stock Exchange) and 100% in the other ports mentioned above. The official website of the privatisation agency says that “the state is in process of appropriate evaluation for the exploitation of this portfolio setting the groups of ports to be privatised through a series of transactions”.
According to the ministry of finances, the privatisation package includes all the 12 ports, including the Port of Piraeus and Thessaloniki in which the government has initially agreed to sell 23.1% and 23.3% of shares respectively (with additional share sales).
China, Russia and Turkey, interested in the share sale
In January, the local press informed that Cosco operator was interested in investing EUR 1 Billion in the Port of Piraeus, the Chinese group being interested in taking over 60% of the port’s shares. The planned investment was presented by the Chinese side after Athens Government has decided to sell stakes in the two large ports (Piraeus and Thessaloniki) and Minister of Finances Giannis Stournaras said in an interview that “Cosco group has expressed its interest in extending investments to Piraeus”, without providing further details.
Also, the Turkish holding Akfen (which holds a stake in TAV Group with activities in air transport) is interested in the privatisation programme and hopes to access the Greek market. “Considering our implication in the tenders launched by Greece, we are paying attention to the privatisation process. Also, massive investments in this country should not be a surprise and we are thus seeking opportunities to invest in the Greek ports”, declared Hamdi Akın, CEO of Akfen, for Anatolia agency.
Russia is also interested in the Greek ports which are connected to the railway network.
“The Government plans to privatise the railway operator responsible for freight and passenger transport, but not the infrastructure. Moreover, it is possible to buy stakes in the ports that are connected to the railway network”, declared the RZD President Vladimir Yakunin.
According to him, Russian Railways is carefully studying the privatisation process launched by the authorities. “If we talk about the development of railway transport, the first thing to consider has to be the synergy: ports, railways and customers. That is why we consider them as a whole, but from the point of view of railway transport pro-fitability”, said Yakunin, adding that RZD could use credits to purchase Greek assets and also considered accessing the capital of the railway operator Trainose.
At the end of February, the privatisation agency, HRADF, announced the development strategy of the 12 ports for which two alternatives are considered. The first consists in the concession of individual port activities through concession agreements that would ensure the commitment of investment and the delivery of quality ser-vices. The second alternative consists in the concession of all the activities of the port (“Master Concession”) through the sale of HRADF majority stake combined with the renegotiations of the current concession agreement between Greece and Societe Anonyme (the owner of the ports) so that it would be aligned to the current international standards and to ensure a high level of investments and delivered services.
“The option to be applied will depend on the development strategy, the competitiveness level and the expressed interest of investors. Nevertheless, the process will involve the concession of the rights of operation and exploitation of the port areas while the property right remains to the Hellenic Railways”, the agency says.
HRADF plans to initiate the privatisation process for the privatisation of the two large ports (Piraeus and Thessaloniki), the first tender being launched in the second half of 2013 for the sale of Thessaloniki Port.
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