The privatisation of Greece’s largest port, Piraeus, has produced some impressive results, boosting its financial performance, deepening the country’s role in global sea transportation, and, perhaps most importantly, uplifting Greek trade.
In 2009, China’s COSCO took on the management of the Piraeus Port Authority (PPA) with the ambition of transforming the Athenian port into a regional leader. It did so with some impressive results across the board.
Improvements to Piraeus’ cargo management capacity have been striking, turning Piraeus into one of the fastest growing ports.
In fact, in the first quarter of 2019 PPA achieved a new record for the port. Piers II and III – which are under concession – handled 1.25 million TEU. This built upon previous success in 2018 when the port authority reported having handled a total of 4.9 million TEU, marking an 18.4% increase from the amount handled in 2017.
“The fact that the 5 million TEU limit is already broken from November brings the Port of Piraeus closer to first position in the Mediterranean and possibly among the top four ports in Europe,” PPA said in a statement.
These changes are sending a global ripple through the industry.
Piraeus is now ranked 6th among Europe’s top 10 ports, holding its spot behind the Netherlands’ Rotterdam and Antwerp, Germany’s Hamburg and Bremen-Bremerhaven, and Spain’s Valencia. It is 2nd among the ports of the Mediterranean – only surpassed by Valencia.
On a global level, Piraeus moved from 93rd spot in 2010 to 32nd in 2018.
The rest of PPA’s activities continue on an upward trend, especially the cruise segment, which has shown a 20% increase in ship calls in 2019. Also impressive is ship-repair activity: the docks’ operation has increased by 53%.
After COSCO took a majority stake in PPA in 2016, it decided to push ahead with a €600 million investment plan in an effort to boost the competitiveness of the port.
The deal was seen as a major vote of confidence in the Greek economy, which had been rattled by the crisis. With an eye on its large upside potential, COSCO snapped up PPA in the first major privatisation to roll ahead in recent years.
With Piraeus at a strategic location between the Asian and European continents, the expansion plans highlight the importance Beijing gives to Piraeus within its landmark Belt and Road Initiative – also known as the New Silk Road – that connects Asia, Africa, and Europe. If successful, the global development strategy will ultimately consolidate China’s global financial power.
The New Silk Road involves more than a trillion dollars’ worth of Chinese infrastructure investments across Asia, Africa, and Europe. And that geographical spread is key. Expectations are set on transforming the Port of Piraeus into a regional transportation hub, making it China’s gateway into the European market.
To help with the investment, the European Investment Bank (EIB) announced in November 2019 that it would provide a loan of €140 million to support the expansion and upgrading of the Port of Piraeus. The largest ever loan for port investment in Greece by Europe’s long-term lending institution will support the implementation of part of investments at the Port of Piraeus in a total investment plan of more than €600 million.
The 20-year loan was signed in Athens in the presence of Greek Prime Minister Kyriakos Mitsotakis; Chinese President Xi Jinping; Xu Lirong, Chairman of COSCO Shipping; Andrew McDowell, Vice President of the European Investment Bank; the Chairman of PPA, Yu Zenggang; and Athanasios Liagkos, Board Member of PPA.
New investment at the Port of Piraeus includes the development of a new port logistics centre, construction of a new cruise passenger handling facility, expansion of car shipping facilities, an improved ship repair area, and the upgrade of the container terminal.
“Greece welcomes the EIB’s support for transformation at the Port of Piraeus. The EIB has been supporting strategic infrastructure across Greece for more than 50 years and has unique technical and financial expertise financing leading ports across Europe and worldwide,” said Prime Minister Mitsotakis.
“Redevelopment of the Port of Piraeus will strengthen connections between Greece and the rest of the world and ensure that Greece benefits from a world-class maritime logistics hub. The EIB is pleased to provide a 20-year long-term loan for the principal maritime hub of Greece and the leading port in the Mediterranean. EIB support reflects the economic benefits to be unlocked in the coming years and the importance of ensuring competitive transport links for Greece and South Eastern Europe,” said EIB Vice President Andrew McDowell.
