China COSCO takes decisive move to acquire Greece's Piraeus port

2016-07-05 15:48

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China COSCO Shipping and Hellenic Republic Asset Development Fund (HRADF) signed a confirmation letter on July 4 in Beijing, which is a decisive move taken by COSCO to acquire 67 percent stake in the Piraeus Port Authority (PPA or OLP in Greek) has been cleared.

COSCO and HRADF sealed the agreement of the deal on April 8, and COSCO agreed to pay the Greek privatization fund 280.5 million euros (311.52 million U.S dollars) for the 51 percent of shares in PPA and the management of the port. Following investments of another 300 million euros total worth in infrastructure works within the next five years, under the deal, the Chinese investors will pay HRADF an extra 88 million euros to acquire an additional 16 percent of shares in PPA.

Earlier this June, the contract was approved by the general assembly of PPA's shareholders and the Greek Competition Commission. Greek parliament ratified the acquisition on June 30 with two thirds of MPs voting to approve the deal.

Wan Min, board director and general manger of COSCO Shipping, said that COSCO would take the opportunities brought by China's Belt and Road Initiative and cooperation between the two countries to build the Piraeus port as the largest container transit hub in Mediterranean area and an international logistics center.

Since the second half of 2009, COSCO's subsidiary Piraeus Container Terminal (PCT) has been operating Piers II and III at Piraeus port under a 35-year concession agreement. In 2015, the port's annual throughput grew to 3.36 million TEU from 880,000 TEU in 2008, bringing it up from the world's 83rd to 39th. It has also created 1,200 new jobs and boosted local economy significantly.

PPA's privatization will add a total of 1.5 billion euros to the Greek economy until 2052, when the concession deal expires, and help create 125,000 jobs, according to a survey of the Foundation for Economic and Industrial Research (IOBE), one of Greece's leading think tanks.

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