Greek port privatisation delayed

The deadline for submitting binding bids for a 51 percent stake in the Port of Piraeus, Greece’s largest, has been extended to November 30 due to the snap elections the country held in September.

“The initial October 30 deadline was set in the summer before anyone knew there would be an election in the fall,” a source told Infrastructure Investor. “However, the process has only been delayed by a few weeks.”

Setting a deadline for the submission of bids was one of the prerequisites the country’s international creditors – the European Commission, the European Central Bank, the International Monetary Fund and the European Stability Mechanism fund – imposed so that Athens could access a portion of its latest €84 billion bailout, the third since the debt crisis hit the country in 2009-2010.

According to the same source, container terminal operators Cosco Group of China, Dutch APM Moeller-Maersk and Philippines-based International Container Terminal Services (ICTS), are expected to submit binding bids.

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.

The Greek state, which currently holds a 74 percent stake in the port, is seeking to sell 51 percent initially. The preferred bidder, who will be required to invest €300 million in the port within five years, will then have the option to acquire an additional 16 percent.

The Hellenic Republic Asset Development Fund (HRADF), which is charged with Greece’s privatisation programme, is applying the same approach to the privatisation of the Port of Thessaloniki in northern Greece, which is expected to proceed in the first quarter of 2016.

Privatising state-owned assets has been one of the terms in every bailout agreement Greece has entered into with international lenders. In 2010-2011, Greece agreed on a programme that would raise €50 billion by the end of this year; as of January 2015, it had raised only €3.1 billion.

However, HRADF announced on Wednesday that a consortium teaming German airport operator Fraport with a subsidiary of Greek energy company Copelouzos, had renewed its offer for a 40-year, €1.2 billion operating a concession of 14 Greek regional airports. The Fraport-led consortium had emerged as a preferred bidder in November 2014, but due to a fluid political climate that has included two general elections, a referendum on austerity measures, and tough negotiations with the EU in less than 12 months, the two sides had not signed a final agreement.

According to HRADF, which declined to comment beyond the press releases already issued, commercial close is expected by year-end.

Should the deal with Fraport be finalised, Greece will be on track to meet its most recently stated goal of raising €1.4 billion by the end of 2015.