Greece relaunches sale of rail operator

After numerous false starts, the Greek government is once again trying to attract bids for the whole of Trainose.

Greece’s privatisation agency is relaunching an international tender for the sale of Trainose, the country’s sole rail operator, after attempting to do so at least twice since 2013.

The Hellenic Republic Asset Development Fund (HRADF), as the agency is known, has started accepting expressions of interest since the beginning of this month. It has set 26 April as the deadline for the submission of binding offers.

“HRADF’s goal is to raise the investor’s interest on Trainose, which currently operates as the sole provider of rail services in Greece,” HRADF said in a statement.

The company was established in 2005 as a subsidiary of OSE, the state-owned company, which owns the rolling stock. In 2008, Trainose became a standalone company.

According to HRADF, Rosco, a newly established company owned by the privatisation agency and which maintains the rolling stock, is also in the process of being privatised.

Greece’s economic troubles and political turmoil have long delayed what started out as an ambitious €50 billion privatisation program in 2011.

The most recent successful sale was announced last month, when HRADF named China’s container terminal operator Cosco the preferred investor for a 67 percent stake in the Port of Pireaus. Cosco was the sole bidder for the country’s largest port after Dutch group APM Moeller-Maersk and Philippines-based International Container Terminal Services (ICTS), which were reportedly interested in the asset, failed to submit binding bids.

Cosco first submitted a binding offer on 12 January, which the agency rejected. A week later, HRADF said it had accepted the “improved” €368.5 million offer for the majority stake.

The total value of the agreement amounts to €1.5 billion. It includes mandatory investments of €350 million over the next decade and an additional €410 million in revenues resulting from the concession agreement.

“The total amount takes also into account the expected dividends and interest receivable by the HRADF as well as the estimated investments (apart from the mandatory) until the expiration of the concession, in 2052,” HRADF said.

The transaction is structured in two stages. Cosco will initially pay €280.5 million for a 51 percent stake in the Port of Piraeus. After making the mandatory investments defined in the share purchase agreement within the first five years, Cosco will then pay an additional €88 million for the remaining 16 percent.

Cosco already operates and manages Piers 2 and 3 of the port, since being awarded a 35-year concession agreement in October 2009. The Piraeus Port Authority (PPA) manages Pier 1.

According to reports, Cosco is also interested in acquiring Trainose but may have competition from Watco, a US transportation company. Neither Cosco nor Watco responded to requests for comment.

Last December, Greece completed another privatisation, awarding a €1.234 billion contract to Frankfurt-based Fraport for the lease and operation of 14 regional airports.