The success story of a Chinese investment in the Greek port of Piraeus

It took the Chinese maritime and port operator giant Cosco almost ten years, to sign and implement an agreement with the Greek authorities. The project was to realise a large investment for a container terminal in the port of Piraeus. Judged by Greek standards ten years to approve a major foreign investment might not be a long time. It seems that Greeks have their own way of looking at business affairs, so it is not a surprise that now they have lost one-quarter of their gross national product and income. This is supposed to be joke but it isn’t. The story of this Chinese investment is very characteristic of the obstacles foreign investors may encounter in this country. As a principle everybody is against it. What is more discouraging, they all have an opinion. Political parties, trade unions, local business bosses, all government Ministers and every possible and impossible civil service have a say and naturally they all disagree between themselves. Sometimes even the local Christian orthodox bishop has a say. In relation with the Cosco investment, George Papandreou, then president of PASOK socialist party and leader of the major opposition in Parliament had “promised” to unravel the agreement, if he was elected Prime Minister. Luckily he didn’t fulfil this promise. Probably he forgot it along with many others he used to convince his countrymen, to vote once more for PASOK and make him a PM. It was not only Papandreou who fought the agreement between Greece and Cosco before it was signed. All the opposition political parties from the Communist Party to extreme right groups, together with state sector trade unions vehemently fought against the agreement. They shut down the country’s seaports for months and actually invited armed Cretans to come and conquer the port of Piraeus, in order to stop this investment! It was just insanity! Thank god it seems that the Chinese were so well disposed in this affair as to be patient enough and wait peacefully for the stormy winds to settle down. Now, after two years of regular operation of Pier II, Cosco has invested €240 million, while another €160 million will be spent by the Chinese firm to develop and operate one more pier. On top of that, the company plans to spend another €300 before the year 2020. The overall investment timetable of Cosco in pier II will be accomplished two years ahead of its contractual obligation, with the operational capacity reaching 2.6 million teu (twenty-foot equivalent unit of transport, container). As for pier III, the first part of it will be ready in May 2013 equipped with five crane bridges (super-super post Panama type). It was not then a surprise that Hewlett-Packard choose Cosco’s Piraeus pier to secure a logistics base to distribute its products in Europe, North Africa and the Middle East. This agreement involves an initial load of 20.000 teu. The Greek train operator TRAINOSE, which is to be privatised soon, also takes part in the Hewlett-Packard and Cosco agreement. In total two thousand more jobs have been created by Cosco so far and another thousand is expected to stem from the new HP operation and the full accomplishment of the pier III investment. It goes without saying that the political parties and trade unions that opposed the project have now swallowed their tongues. In short the Piraeus port affair tells the entire story why Greece lags behind the other south Eurozone countries, with unemployment having reached 25.5%. All that, despite the huge unexploited development potential the country has in transport, energy, tourism and other sectors. It is disappointing that some giant luxury cruise shipping companies have repeatedly asked to make Piraeus their starting port and base, but trade unions and political extremists are constantly undermining the project. In any case the Cosco investment may serve as an example to silence the nonsense around foreign investors. Cosco itself is now candidate for a similar concession in the northern port of Salonika.