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Can A Chinese Shipping Conglomerate Save Greece's Biggest Port?

Meet Captain Fu, who runs the Piraeus Container Terminal, which has been owned since 2009 by Chinese giant Cosco. So far, at least, business has barely been touched by the Greek crisis.

SS Hellas Liberty, one of the last surviving Liberty cargo ships, in Piraeus Harbor.
SS Hellas Liberty, one of the last surviving Liberty cargo ships, in Piraeus Harbor.
Alain Salles

ATHENS - Captain Fu Cheng Qiu has a lot to be happy about. The general director of the Piraeus Container Terminal , a subsidiary of Chinese container giant Cosco, has managed to mostly steer clear of the Greek crisis.

Three years after taking over the break-bulk terminal of Greece’s largest port, Piraeus, the company's activities have grown by 70%, even as local freight -- directly linked to the national crisis -- dropped by 20%.

The terminal was modernized, new electric cranes were set up to unload cargo more quickly, and a new terminal – with a depth of 18 meters – is under construction to host larger ships. The first pier should be operational in the spring of 2013, earlier than first expected.

Sitting in his office, in front of Chinese, Greek and European flags, "Captain Fu" talks about how impressed he is with his Greek workers: "Out of Cosco's 270 employees, we are only seven Chinese nationals. Greeks are very good and work really hard."

His deputy director, Zhang Anming, agrees, as he shows us the firm's facilities in front of his workers: "All the builders are Greek. They are top-notch. There is no delay, they are even running ahead of schedule."

The wave of criticisms from Northern Europe about Greeks being lazy does not resonate with the Chinese. In the entrance hall, photomontages show Greek and Chinese temples, the Parthenon and the Great Wall of China – a celebration of the two antique cultures.

In the large meeting room, the walls are covered with photographs of meetings between Chinese and Greek leaders and a map of the Mediterranean Sea and the Black Sea. The map gives us precious insight into the Chinese strategy – Piraeus is the closest port to the Suez Canal from where Chinese container ships arrive. From there, 22 ports, whose names are written in Chinese on the map, are easy to access, from Barcelona (Spain) to Odessa (Ukraine).

Cosco is present in many European ports, from Antwerp (Belgium) to Naples (Italy) – where Captain Fu was working before coming to Piraeus – as well as Hamburg (Germany) or even Fos-sur-Mer (France). Piraeus is the main entry port into Southern and Eastern Europe, to the Black Sea and Russia.

Huge ships enter the harbor loaded with containers. New electric cranes are able to pile up six containers on top of each other. The containers are then loaded onto trucks or smaller ships headed toward other Mediterranean ports.

"The equipment was old and in bad shape. We repaired or replaced it," says Fu. "When I arrived here, we would operate between 10 and 12 containers per hour. Today, we operate 44 per hour. Ship owners are happy – they no longer waste time and money. Neither do we!"

Terminal 2 has 270 permanent PCT employees. Depending on the needs and ship arrivals, the company uses a subcontractor that provides extra workers – sometimes hundreds of them. This has sparked anger amongst trade unions, which denounce subcontracting and low-wages. To welcome Cosco's arrival, they held a strike for several weeks during the spring of 2009.

Chinese expansion

When he was a member of the opposition, former Socialist party leader George Papandreou had criticized the privatization of the port and promised that he would renationalize it. But when he became Prime Minister in October 2009, he did not keep his promise and Cosco was able to take over the Piraeus container terminal.

Further away, the Piraeus Port Authority, a public firm, operates terminal 1. The terminal is smaller and the company has 1,300 permanent workers. "We are competing with PCT to attract new cargos although our situation is different," explains the general director of the port, Stavros Hatzajos. "Their workers are less qualified. We cut our labor force thanks to people retiring."

The Port Authority also receives money from rent and services from Cosco, nearly 30 million euros in 2011. The 35-year long concession should bring at least 560 million euros to the Piraeus Port Authority.

Cosco has also said it would invest more than 300 million euros, which has already allowed the firm to build a refrigerated warehouse to store perishable goods and launched the construction of a third terminal. In November, computer manufacturer Hewlett Packard announced it wanted to make Piraeus its logistics base for Southern and Eastern Europe, and the Middle East. The project also includes public railway company Trainose, which is on the list of the companies likely to be privatized by the Greek government and is attracting interest from the Chinese.

Merchandize would arrive at Piraeus and then leave on train or other ships. The deal depends on the connection of the port to a neighboring merchandize railway station that will be completed shortly. If these infrastructure projects are confirmed, Cosco and Piraeus' growth will benefit greatly. The project was welcomed by the Greek government, in the face of many other foreign companies currently leaving the country.

The Chinese container giant does not plan to stop there – it is also interested in nearby terminal 1. Athens has announced that it would privatize every Greek port. M. Hatzakos, on the other hand, has said he wanted "competition to be maintained at the port through the establishment of concession to a new company."

"The Chinese are investing for the long term and have plenty of time," notes a consultant from the maritime industry who worked in China and wishes to stay anonymous. The marriage of convenience between Greece and China should last for a long time, because "Greece and China share many similarities," adds this observer. "Cosco, a state-owned company, knows how to deal with governments. In China, business is tied to politics. You have to know the right people, like in Greece. Corruption is rife in both countries."

Cosco also has good relationships with Greek ship owners: "They build their ships in Chinese shipyards and are not competing with Cosco, which is specialized in cargo freight," says the consultant.

In 2013, Greek Prime Minister Antonis Samaras is expected to go to Beijing for an official visit. No doubt that the photograph of his meeting with the new Chinese leaders will end up on the walls of PCT's meeting room back here in Piraeus.

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