Greece paves way for China's COSCO to raise Piraeus Port stake

Piraeus Port Authority SA

30/09/2021 12:36

ATHENS, Sept 29 (Reuters) - Greek lawmakers on Thursday
approved an amended deal with Chinese shipping group COSCO that
will allow it to raise its stake in Greece's biggest port of
Piraeus, paving the way for Greece to secure a major investment.
    Under a 2016 Greek privatisation deal, COSCO Shipping
 01919.SS  bought a 51% stake in Piraeus Port Authority (PPA)
 OLPr.AT  for 280 million euros ($328 million). It then
committed to mandatory investments worth about 294 million euros
over five years to purchase an additional 16% stake for 88
million euros.
    COSCO was due to fulfil this key condition by August, but it
ran out of time, blaming delays beyond its control, and has been
in talks with the Greek government to resolve the issue.
 urn:newsml:reuters.com:*:nL5N2NE2VZ
    Last week, COSCO and Greece agreed to amend their 2016
agreement, which they said would "settle effectively" all issues
which arose during the implementation of the mandatory
investments.
    Under the amended deal, the state will transfer the 16%
stake to COSCO and give it another five years with the
possibility of a further five-year extension to conclude its
investment plan.
    The main opposition Syriza party said that the government
was facilitating COSCO, even though it had failed to fulfil its
contractual obligations.
    Shipping Minister Giannis Plakiotakis acknowledged that
COSCO has concluded only a third of the mandatory investments or
about 99 million euros so far but this was partly due to
litigation and bureaucracy.
    "Indeed, for many reasons, what has been agreed for the
first five years was not respected," Plakiotakis told Greek
lawmakers on Wednesday.
    But he said the only other option for the two sides was
arbitration which would stop investments, with an immense damage
to the Greek economy and to Greece's relations with "a powerful
third country".
    The new agreement stipulates that if COSCO fails to conclude
the majority of the investments on time, it will have to give
the stake back to Greece. 
    Piraeus has grown into a major transhipment hub for goods
destined for Mediterranean and Black Sea ports since COSCO took
over its container operations in 2009 and upgraded its
infrastructure.
    A major component of COSCO's mandatory spending is upgrading
a cruise terminal for more large ships to dock and help
tourism-reliant Greece attract more visitors. But only months
after starting, COSCO suspended work last year following an
appeal by locals over environmental concerns.
    
($1 = 0.8537 euros)

 (Reporting by Angeliki Koutantou; editing by David Evans)
 ((angeliki.koutantou@thomsonreuters.com; +30 2102214608;
Reuters Messaging: angeliki.koutantou.reuters.com@reuters.net))