German Fund Snaps Up Greece’s Thessaloniki Port

News of the privatization of the Thessaloniki Port arrived late last week via Greece’s liquidation fund. According to the Hellenic Republic Asset Development Fund the sale of its 67% stake in Thessaloniki Port to Deutche Invest Equity Partners, Belterra Investments and CMA CGM’s ports division, Terminal Link has now taken place. Underneath the positives of the sale, there’s growing fear and resentment from those who see Greece being sold off and sold out.

The German-led joint venture,  South Europe Gateway Thessaloniki (SEGT), won the bid to vest in the port over International Container Terminal Services Inc. (ICTSI) and DP World to win the concession agreement, after HRADF had asked the bidders to improve their first-round offers in April, and SEGT’s proposal came out ahead.

The price of the shares acquisition was $275 million, and the contract requires a further $215 million investment in the port within the next seven years, along with concession revenues. In total, the agency estimates that the agreement is worth $1.3 billion. HRADF chairman Aris Xenofos had this to say about the sale:

“The exploitation of the Thessaloniki port along with the positive impact the successful conclusion of the exploitation agreement of Piraeus Port already has, form an axis of growth and development that crosses vertically our country, further enhancing the role of Greece as the European gateway to international companies for trade and cruise.” 

Greece assets being sold off these last years since the economic downturn has been the source of contention among those who would see the country’s assets protected. Five years ago, when China’s global shipping carrier, Cosco acquired the port of Pireaus for €500m (£373m), it the biggest foreign investment in Greece in modern times. The downside of such purchases, of course, is that profits and potential from these assets go abroad instead of back into the Greek economy. The fact that  Syriza, the party of Prime Minister Tsipras has promised to negate privatization schemes in their first days in office now grates at the Greeks who see their country be sold off for pennies on the dollar.

The first day Syriza took control of the government it was announced that a privatization programme launched to trim the country’s staggering €320 billion euro (then) debt load was in effect null and void. Earlier this month US Ambassador Geoffrey Pyatt said Washington was concerned about who would snap up Thessaloniki. But Pyatt’s concern centers on US-Russia competition in the region. The consortium formed by Germany’s Deutsche Invest Equity Partners, France’s Terminal Link and Belterra Investments, which is owned by Russian-Greek entrepreneur Ivan Savvidis seem to be of grave concern for the Americans, no doubt because of Savvidis’ alleged closeness to Russian President Vladimir Putin. But for most Greeks finding a Caucasus Greek in the mix of investors has to seem as a breath of fresh air. Savvidis once supported Tsipras, so perhaps a Greece-Russia energy partnership is not totally out of the picture yet.

Given the fact the US will be shipping liquified natural gas (LNG) highlights Greece’s role as an energy junction, which is of paramount concern given the ongoing joust in between Ameria and Russia over energy exports. Since Ambassador Pyatt was instrumental in the Ukraine situation for the US, it’s no big secret the shift in geostrategy and policy has been to Greece in the last months. Many Greeks see Tsipras and Syriza as puppets of American and German interests since these literal reversals of Tsipras campaign promises.

Finally, news a consortium will start building a huge LNG terminal in 2018 at Alexandroupolis to connect with the construction of the Greek section of the Trans Adriatic Pipeline (TAP) bears watching. According to reports, U.S. natural gas exporter Cheniere Energy, and Bulgaria’s Bulgartransgaz, Bulgargaz and Bulgarian Energy Holding will be key players in this project. The US investors in the Alexandroupolis project would seem to be concerned about Ivan Savvidis’ Russian genes. But no matter what else takes place, it’s clear the wolves are about to fight over a Greek maritime carcass.