Chinese Shipping corporation COSCO Greece objected on Wednesday to terms submitted to parliament for the sale of Piraeus Port to China COSCO Shipping, saying they were inconsistent with those previously agreed with the Greek privatization agency TAIPED. COSCO blames Greece for amending the original Piraeus Port deal agreed between the two sides on April 8th, saying that “key elements of the deal appeared to have been altered”.
According to Reuters:
Greece sealed the sale of Piraeus Port Authority (OLPr.AT) to China COSCO Shipping Corporation (601919.SS) in April, a major step for the bailed-out country in meeting the demands of international creditors that it step up privatizations.
Under the 368.5 million euro (£298 million) deal, COSCO will buy 51 percent of Piraeus for 280.5 million euros and the remaining 16 percent for 88 million after five years and once it completes investments of 350 million euros over the next decade.
The terms of the deal were submitted by the country’s shipping ministry to parliament for approval on Tuesday. But, COSCO Greece said in a letter to lawmakers seen by Reuters that key elements of the deal appeared to have been altered.
“The content of the specific plan is a complete reverse of what was agreed between COSCO HK and TAIPED (HRADF),” an email sent by COSCO Greece said, referring to the country’s privatization agency.
It said that ‘key terms’ on which COSCO’s offer was based, had been erased. It included an obligation by the state to approve project licensing within a specific timeframe.
A lack of such guarantees, the COSCO note said, would have materially affected the amount it bid for the project, and possibly affected the submission of a bid altogether.
Shipping Minister Theodoris Dritsas acknowledged that there were differences, but said the government had the right to make changes and the ministry was willing to make improvements. “The government will look into it, it will look into the objections and will probably consider making improvements,” Dritsas told lawmakers. (full story)
According to sources from the Shipping Ministry, changes were necessary so that there would e “adjustment to Greek legislation.” Cosco’s objections were not related to “such hot issues like the workers’ rights but to “pricing issues,” the same sources said.
Among the changes cited by the Chinese company was the obligation of the Greek state to approve licensing for projects within a 90-day time frame. Removing this from the bill, the company said, would affect the amount it bids for a project and could also discourage the submission of a bid. Another issue raised by COSCO, that the stating that labor laws governing private companies will also apply to OLP was removed.
Left-wing Dristas was against the sale of Piraeus Port ever since he became a minister. Some Greek media rpeort that the Prime Minister was not aware of the changes and that Dritsas acted ‘unilateral’.
The Greek government has to hurry up with the changes of the changes as Prime Minister Alexis Tsipras starts his official visit to China, tomorrow, Thursday, July 1st 2016. And he could find a Small Wall of China raised right outside the airplane doorstep.
PS It’s not fun to play games with the former communist now neo-liberal Chinese.