Privatisation of Ports Stalled

The long-awaited and hoped-for development of the Athenian Port of Piraeus and other ports in Greece, ports slated to be privatised under the government’s economic programme to rescue the country from bankruptcy, has been stalled.

The project is proving to be much more complicated than what was initially believed due to delays caused by Greece’s omnipresent bureaucracy and by a widespread climate of indecision which is starting to discourage potential foreign investors. Midway through December, the Greek state privatisation fund (TAIPED), the new public agency charged with implementing the government’s privatisation plan, had officially started procedures to sell off a series of state-owned properties and infrastructures.

The outlook for the Finance Ministry regarding the interest of foreign investors was enthusiastic, particularly regarding three large “packages”, including one regarding the privatisation of 12 ports (including Piraeus and Thessaloniki), for which the government in Athens agreed with the Troika to sell 23.1% and 23.3% of shares, with further sales of shares or granting of rights for use within the first 3 months of 2012.

Since then, however, reports Athens daily Kathimerini, nothing has been done and no concrete decisions are expected before the end of February, when progress was already expected for the “Attica Port System” project, following the presentation of reports from legal and financial consultants regarding the feasibility of the project for TAIPED.

Meanwhile, news has leaked that China Ocean Shipping Company (COSCO), a Chinese global shipping giant, which expressed serious interest in the port of Piraeus and which wants to protect the considerable work that it has done there, is still waiting for a VAT reimbursement of nearly 32 million euros from the Greek government for investments it has already made. The issue has become a point of contention with Beijing, Chinese Ambassador to Athens Du Qiwen recently admitted, while speaking about COSCO’s problems due to Greece’s incredibly slow bureaucracy.

Last month, Premier Lucas Papademos met with Constantinos Mitropoulos, TAIPED’s CEO, who had already met with the relative secretary general and government officials, including Minister Adonis Georgiadis, responsible for merchant marine affairs, and Thanos Pallis, General Secretary of Ports and Port Policy.

As the latter announced, the government and TAIPED are now waiting for their two financial consultants, Morgan Stanley and the Bank of Piraeus, to complete assessments, expected to occur at the end of February or the beginning of March. Their reports will determine whether it is more advantageous to sell only 23.1% of shares of the Piraeus Port Authority (already under TAIPED’s jurisdiction) or to wait for the completion of the “Attica Port System” project (a merger of the enterprises of the ports of Piraeus, Rafina, Lavrio and Elefsina) and then sell a share in the new company.

Another possible scenario is selling the entire company. In this case, the Piraeus Port Authority must decide whether or not it should split into two separate entities (regulatory and executive) and then sell the latter, while keeping the former. The same strategy was adopted by the German government for the Port of Hamburg. “We are putting the pressure on the financial consulting firms to obtain the final reports by the end of February, but they probably will not be ready until March,” said Pallis, who did not rule out the possibility of Greece renegotiating the terms of the privatisation of the port with its international creditors.

The deadline for early elections in the spring is complicating the situation further. If needed, a few days ago Piraeus Port Authority chairman Giorgios Anomeritis said that 51% of the company will continue to be held by the state.
(source: ANSA)