Cosco’s OLP investments stalled by red tape and vested interests

Two years and three months after the acquisition of Piraeus Port Authority (OLP) by China’s Cosco, a large part of the investment foreseen by the agreement with the Greek state has not yet been implemented. In the meantime, there are growing rumors of incompatibility between the Greek and Chinese corporate cultures and increasing complaints, mainly from groups with vested interests in OLP when it was state-owned.

The OLP container terminal may have risen to 37th place on the global chart and to third in the Mediterranean – with the Chinese owners promising the region’s number 1 spot – but this does not seem to be making an impression with parties that had expected an instant boost to their takings from the inflow of Chinese capital. Instead, they see the old status quo collapsing and Chinese plans for shipyards, malls and hotels threatening Piraeus’s existing economic landscape.

So what is going on? Are the Chinese stalling on the promised investments, or have they run into obstacles? No one knows, but what is true is that many of their investments have stumbled on the licensing process.

For example, the port’s unification with a 90,000 square meter plot owned by the former Public Property Management Organization (ODDY) for the development of logistics facilities will not be getting a license from the Transport Ministry, as it would compete with the nearby Thriasio plot, one-third of which has been conceded to a private consortium, with the rest going up for grabs by tender soon.

And OLP’s application for a shipyard permit was rejected by the Economy Ministry, following strong reactions by Greek contractors and small shipyards fearing that the competition would drive them out of the market. Last Friday, meanwhile, the Council of State froze the tender for the construction of a new cruise ship dock after the objection of two major Greek construction companies.

In fact, a new major floating tank has already arrived at OLP, and several smaller investments in heavy maintenance and equipment have also been implemented, but they do not stand out.

On the contrary, the master plan for the port, which includes a mall and up to four new hotels, has run into opposition from tradesmen and Piraeus’s chamber, which are concerned about competition, while the upcoming general elections are making state and local authorities wary about making any major decisions.