- China COSCO Shipping has completed the acquisition of an additional 16% stake in the Greek port of Piraeus, raising its share to 67%
- It paid EUR280.5 million for the initial acquisition of a 51% stake in the port and will pay another EUR88 million within five years for the additional 16%
- The group will work to build Piraeus Port into a regional logistics hub, and open more shipping routes and railroads to enhance the port’s competitiveness
- The port is seen with the potential to become China’s and the rest of Asia’s gateway to Europe, as well as a major ship repair base
China COSCO Shipping Corp., China’s largest shipping group, announced on October 25 the completion of an additional 16% stake acquisition in the Greek port of Piraeus, marking a fresh step in China’s move to turn the port into a major international transit hub for products and services between Asia and Europe.
The move came as Greece’s parliament approved the sale of another 16% stake in Piraeus Port Authority SA (PPA), the largest port in Greece, to COSCO Shipping in September. It raises the Chinese company’s stake in PPA to 67%, according to a report from China Daily.
Under the agreement signed between Greek government-owned Hellenic Republic Asset Development Fund (HRADF) and COSCO Shipping in 2016, the Chinese investor paid EUR280.5 million (US$327 million) to HRADF for the initial acquisition of a 51% stake in PPA.
It will pay another EUR88 million within five years for the additional 16% in PPA, according to the deal.
Xu Lirong, chairman of the Shanghai-based shipping group, said that as a next step, the group will work to build Piraeus Port into a regional logistics hub, and open more shipping routes and railroads to enhance the port’s competitiveness.
The Chinese group has been using Piraeus Port as a transshipment hub for Asian exports to Europe arriving on container vessels from China, as it is the nearest western port to Egypt’s Suez Canal.
In 2010, shipping containers processed in Piraeus Port totaled 880,000 twenty-foot equivalent units (TEUs), while in 2020 they reached 5.45 million TEUs despite the disruption caused by the COVID-19 pandemic.
Purchasing a majority stake in Piraeus Port will enable China, Greece and other economies participating in the Belt and Road Initiative to facilitate and enlarge their export volume and generate business opportunities in the services sector, said Zhou Zhicheng, a researcher at the Beijing-based China Federation of Logistics and Purchasing.
Given the strategic importance of Piraeus’ geographic location for global trade, Zhou said the port has the potential to become China’s and the rest of Asia’s gateway to Europe, as well as a major ship repair base and a cruise port in the Mediterranean.
Piraeus Port currently has six major business segments, namely, container terminals, logistics and warehousing, ship repair and building operations, cruise terminals, automobile terminals and ferry terminals. Its annual container throughput capacity has reached 7.2 million TEUs.
Photo by Rakoon
