Port a good example of China deal
Strategic Piraeus is set to expand under investment from COSCO
As China and Europe are taking decisive measures to improve regional economic integration and goods flows, Piraeus Port is on track to become the biggest commercial port in the Mediterranean Sea Basin.
COSCO Pacific Ltd, a subsidiary of COSCO Group, the fifth-largest container terminal operator in the world, has invested 4.3 billion euros ($5.9 billion) on a 35-year management lease for the No 2 and No 3 piers in Piraeus Port, which it has been operating since June 2010.
Because the Mediterranean is a key European entry point for Chinese products such as clothing, manufacturing machineries, household appliances, vehicle parts and industrial yarn, as well as automobiles from Japan and South Korea, COSCO applied and has been shortlisted as a potential buyer to acquire a majority stake in Piraeus Port Authority SA this month.
Further cooperation in investment and maritime transportation is also on the discussion agenda between visiting Chinese Premier Li Keqiang and his counterpart Greek Prime Minister Antonis Samaras.
Ma Zehua, chairman of China Ocean Shipping (Group) Co (COSCO), the country’s largest shipping operator, said that with a part of EU’s economic center moving gradually to southern Europe and the Mediterranean region, Piraeus Port, as Greece’s largest transshipment port, has big potential to attract international shipping companies to set their regional transit centers and service branches.
Piraeus Port is an important transit port to connect various ports in Western Europe, Eastern Europe, the Balkans, Black Sea, Mediterranean and Africa, and also one of the largest container ports in Europe.
Investing in this port will not only help COSCO carry out China’s first container port business in an overseas market, but also reach the company’s goal of building Piraeus Port into a bigger port of call for the China-Europe shipping route, Ma said.
Port of call is an intermediate stop for a vessel on its sailing itinerary, which may include up to half a dozen ports. Cargo ships can take on fuel and supplies at these ports, as well as load or unload cargo goods.
The Chinese company spent an extra 230 million euros in 2013 to enhance the port’s cargo handling capacity over the next seven years, including building a new pier and almost tripling the volume of cargo that the port can handle.
“Running such a big port in Greece can further ensure COSCO ships’ sailing schedules, reduce the cost in particular the container-shipping costs and expand business networks of COSCO’s port business in southern Europe, as well as promoting trade between China and European nations in the Mediterranean, the Balkans and the Black Sea regions,” said Ma.
Chen Yingming, executive vice-president of Shanghaibased China Port and Harbors Association, said as the Greek government is seeking effective solutions to create more jobs and new market growth points through privatization of selected State-owned assets, it definitely hopes that Piraeus Port could become a gateway for China’s trade and investment to Europe.
“Developing port business in Greece means huge company and government investment in infrastructure and related service projects,” Chen said.
With a capacity of handling more than 3.16 million 20-foot equivalent container units per year, Piraeus port has become a partner for the strategic goals of multinational giants such as US electronics company Hewlett-Packard and Chinese networking major Huawei Technologies Co for the maritime distribution of their products to Europe, Northern African countries and the Middle East. Contact the writer at email@example.com
Premier Li Keqiang and Greek Prime Minister Antonis Samaras inspect a guard of honor during a welcome ceremony at Athens International Airport on Thursday. Li is scheduled to inspect the Piraeus Port on Friday.