Piraeus Port concession agreement soon to be signed

After months of turbulences and dockworkers’ reactions, the concession agreement regarding the container terminal of Piraeus port is expected to be signed on November the 25th.

The latest development was the approval of the terms of the agreement by the Court of Audit, giving Cosco Pacific and the Port Authority of Piraeus (OLP) the green light to move ahead with the deal. Should there be no other hurdles, the agreement will be signed when Chinese President Hu Jintao is scheduled to perform an official visit in Hellas later this month. He will be accompanied – among others – by Cosco’s President and CEO, Capt. Wei Jiafu. Nevertheless, dockworkers aren’t going to give that easily. They have asked legal advisors to give them their opinion on whether the agreement can be overruled Under the terms of the deal, OLP will receive more than a fifth of revenues from a new cargo handling company to be run by China's Cosco, worth an estimated 3 billion euros over 35 years. Cosco will upgrade and run cargo port facilities for up to 35 years, while rental costs would push the guaranteed amount of the transaction to 3.4 billion euros. "OLP will receive 21 percent of the new company's revenues for the first eight years and about 25 percent in the next years," the company said earlier in a statement. OLP, which expects to make a loss this year due to labour action by dock workers, has said the deal will return it to profit once Cosco enters Piraeus in 2009. Cosco is expected to pay OLP an initial 50 million euros in 2008. Among other terms, the contract sets a 2015 deadline for Cosco, the world's fifth largest port operator, to complete the construction of one pier. If Cosco fails to meet the deadline, it has agreed to refund 112 million euros to OLP.
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