COSCO Wins Operating Right of Greek Ports
27 / 11 / 2008
BEIJING, Nov 27, 2008 COSCO Pacific Ltd. the terminal operator under the aegis of COSCO Group, has clinched a deal to win a 35-year franchise operating right of the No. 2 and No. 3 terminals at the Port of Piraeus in Greece.
The company announced the news on November 25, 2008, saying that the operating right [...]
BEIJING, Nov 27, 2008 COSCO Pacific Ltd. the terminal operator under the aegis of COSCO Group, has clinched a deal to win a 35-year franchise operating right of the No. 2 and No. 3 terminals at the Port of Piraeus in Greece.
The company announced the news on November 25, 2008, saying that the operating right would be acquired for EUR 831 million. In the future, COSCO Pacific will input EUR 236 million in expanding the two terminals.
Its president and CEO Wei Jiafu believes that the world’s shipping industry is likely to rebound in the first half of 2009, when the market demand increases, so the company will definitely recover its investments within 35 years.
Piraeus is the largest Greek port in terms of throughput. Its after-tax profit amounted to EUR 24.838 million in 2007. The No. 2 terminal is currently under operation, with throughput reaching 1.37 million TEUs in the year.
In February 2008, Piraeus Port kicked off worldwide bidding invitations for the No. 2 and No. 3 terminals. On November 19 of the year, COSCO Pacific announced that the company had become the sole bidder and provisional bid winner of the two terminals.
According to agreements inked between both sides, COSCO Pacific will acquire the lands and existing facilities of the No. 2 terminal, as well as the exclusive usage and commercial operating right of some land earmarked for the construction of the eastern part of the No. 3 terminal for totally EUR 831 million.
The company plans to expand the No. 2 terminal in two phases respectively to be completed before May 31, 2011, and the same date of 2012. Meanwhile, the eastern part of the No. 3 terminal will be built up by October 31, 2015. The total investment in the two projects is evaluated to amount to EUR 236 million, which will be paid by proprietary funds, financings, and bank loans.
Thus, the Piraeus project marks the fourth overseas port investment of COSCO Pacific. Previously, the company has taken a stake in three terminals respectively situated in Singapore, Antwerp of Belgium, and Suze Canal. COSCO Pacific expects that its revenues from the two newly acquired terminals will reach EUR 2.83 billion during the 35-year operating period.
Facing recent downturn in the global shipping market, Wei Jiafu says the reason is that the financial crisis dampens investors’ confidence. However, the depression will not last long. He points out that many positive factors are boosting the world’s economy, such as continued globalization.
Meanwhile, elastic burgeoning economic entities will remain growth in the future; the governments in China and other countries actively save the capital markets by means of strong fiscal and monetary policies; the traffic volume of dry bulk cargos steadily grows; China’s crude import demands are still robust; and shipping orders are postponed or canceled.
Wei Jiafu suggests that ship carriers, shippers, traders, shipyards, terminal operators, and banks should cooperate with one another to combat the financial crisis together.
Source: COSCO Wins Operating Right of Greek Ports
27 / 11 / 2008 | Tags: ECONOMY, Europe, Hellas Greece, PACIFIC |
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