Piraeus, the largest port in Greece and one of the largest to the Mediterranean Sea, plays a vital role in the development of the international trade activity, as well as of the national economy. 10 km away from the centre of Athens, it is the main gateway for the imports and exports of Greece. Likewise, its location near the international trading routes makes it an international hub ensuring cargo transhipment through the necessary infrastructure. For Greece, Piraeus is the main cruise port (50%) and the main container port (90%).
The development programme until 2016 and the stimulation of logistics activities made by the government could determine the launch of the port in the first 5 container hubs, declared the Development Minister Kostis Hatzidakis. Along with the intention announced by the government, Piraeus is currently elaborating the development programme, since the operator Cosco Pacific (China), which has two piers, will build a third one (with a capacity of 1.1 million TEU) and will provide transport services to three big companies (such as Hewlett-Packard and Huawei Technologies Co). The investments allocated up to now by the Chinese company have led to the increase of container transit.
According to the National Bank, the international traffic in Piraeus could increase from 2 million TEU in 2012 to 2.5 million TEU in 2015. “Transhipment is the main factor that influenced the dynamics of the Port of Piraeus in the past years and represents ¾ of the container traffic in the port. The new infrastructure investment will determine the capacity increase by 60%, allowing an increase to 2.5 million TEU by 2015, from 2 million TEU in 2012”, indicates the bank report (Container Ports: An Engine of Growth).
The report states that, based on the estimates, “with the existing infrastructure – without including future investments, Piraeus should absorb 6.8% of the Mediterranean transhipment traffic, which is not far from the achievements in 2012. Including the increase of the capacity planned for the Pier II and the construction of the third one by 2015, Piraeus will operate 7.6% of the Mediterranean transhipment traffic market”, indicates the report.
2013 was the fourth profitable year, due to the developments made in 2009, a turnover of EUR 115 Million, and as a result, the authorities decided to establish a development programme amounting to EUR 960 Million.
Although it has a potential of traffic increase, the main reason for the limited use of the port as an important container traffic point is the reduced competitiveness of the land (rail and road) transport network both in Greece and in the neighbouring countries.
China and Russia are still interested
To stimulate the demand of the sea and railway transport, the Greek Government plans to privatize 12 ports, the most important ones being Piraeus and Thessaloniki. The entire national program for the sale of Greek assets is estimated at EUR 11 Billion, and for the sale of the stake in the two ports, the Hellenic Republic Asset Development Fund (HRADF) estimates that the value reaches EUR 450 Million, says the local media.
In the case of the Port of Piraeus, the authorities will sell a 67% stake in the port. Therefore, the Hellenic Republic Asset Development Fund has announced in March the initiation of the privatization process of the port. “Considering the comments made during the discussions of the Economic Affairs Committee, HRADF has approved the terms of the international tender process for the sale of a 67% stake in the port. The tender process will be launched soon and will be completed within a year”, shows the press release of the institution.
Currently, the port is owned at 74.14 %, the remaining 25.86 % stake being sold in 2003 (through listing on the Athens Stock Exchange).
The authorities have completed elaborating the terms of the call for tender, which have been presented to Parliament and, after the approval, the tender will be launched.
The purchase of the stake package would be of interest for Cosco operator which would plan to invest EUR 1 Billion in the Port of Piraeus.
“Cosco Pacific Ltd has already expressed interest in acquiring the Piraeus stake. Piraeus Container Terminal, the company’s Greek unit, has operated Pier II at Piraeus Port under a concession agreement and is building a third pier”, declared at the beginning of the year Miltiades Varvitsiotis, the Greek Shipping Minister.
Likewise, during a meeting with the Chinese Deputy Minister of Foreign Affairs, the Greek Development and Competitiveness Deputy Minister, Notis Mitarakis, required the Chinese investors to participate in the tender of the Port of Piraeus.
Along with the Chinese company, interest in the tender was announced in March by the president of the Russian railway company, Vladimir Yakunin. “It is an interesting project because we can estimate the railway transport traffic”, said Yakunin, answering to a question from the media referring to the company’s intention to participate in the privatization of the Port of Piraeus.
The initial tender for the port privatization could be launched at the end of April and RZD will send the offer, said Yakunin. We recall that RZD also considers important investments in the privatisation of Rosco, TrainOSE and the port of Thessaloniki, but “for the moment the company has not sent a final decision as Greece works with the EU, which believes that the railway company Trainose should be privatized first”, explained Yakunin.
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