COSCO Argues Piraeus Port Sale Terms


Published Jun 29, 2016 7:31 PM by Reuters

On Wednesday, COSCO Greece objected to terms submitted to parliament for the sale of Piraeus Port to China COSCO Shipping, saying they were inconsistent with those previously agreed with the Greek privatization agency.

Greece sealed the sale of Piraeus Port Authority to China COSCO Shipping Corporation in April, a major step for the bailed-out country in meeting the demands of international creditors that it step up privatizations.

Under the 368.5 million euro ($410 million) deal, COSCO will buy 51 percent of Piraeus for 280.5 million euros ($312 million) and the remaining 16 percent for 88 million euros ($98 million) after five years and once it completes investments of 350 million euros over the next decade.

The terms of the deal were submitted by the country's shipping ministry to parliament for approval on Tuesday. But, COSCO Greece said in a letter to lawmakers seen by Reuters that key elements of the deal appeared to have been altered.

"The content of the specific plan is a complete reverse of what was agreed between COSCO HK and TAIPED (HRADF)," an email sent by COSCO Greece said, referring to the country's privatization agency.

It said that 'key terms' on which COSCO's offer was based, had been erased. It included an obligation by the state to approve project licensing within a specific timeframe.

A lack of such guarantees, the COSCO note said, would have materially affected the amount it bid for the project, and possibly affected the submission of a bid altogether.

Shipping Minister Theodoris Dritsas acknowledged that there were differences, but said the government had the right to make changes and the ministry was willing to make improvements.

"The government will look into it, it will look into the objections and will probably consider making improvements," Dritsas told lawmakers.

The port, a gateway to Asia, eastern Europe and north Africa, handled 16.8 million passengers and 3.6 million 20-foot equivalent units (TEUs) of containers in 2014. COSCO has been operating one of its container terminals since 2009.

Lawmakers had been expected to endorse the deal on Thursday, before Prime Minister Alexis Tsipras's state visit to China which starts on July 1.