China's state-owned shipper China Ocean Shipping (Group), also known as Cosco Group and owned by China COSCO Holdings, is on track to acquire Greece's largest container port, gaining a key foothold to expand China's economic and military presence in Europe and Africa under the "One Belt, One Road" trade route initiative.
There were no other bidders, which suggests that China’s strategic aims of using the Greek port of Piraeus as getaway to Europe is one step closer to realization.
Greece's privatization agency board said that Cosco was the only confirmed bidder for a binding stake in the country's biggest harbour. It had asked Cosco for an improved financial offer which Cosco would consider during the next week.
The Hellenic Republic Asset Development Fund, which handles state asset sales, didn’t reveal the valueof the bid.
According to sources Cosco’s bid for a 67 percent stake in the Mediterranean port was seen at around 700 million euro (US$758 million). Cosco already runs container operations at two piers in Piraeus Port Authority SA.
Cosco, the Hong Kong-listed, Chinese state-owned company, had always been considered a front-runner for the stake, given its foothold in the port. APM Terminals, owned by Danish shipping conglomerate AP Moller-Maersk A/S and Philippines-based port operator International Container Terminal Services Inc. were also short-listed to bid, but in the end only Cosco put in an offer.
Analysts see Chinese investment in Piraeus as a key part of China's One Belt, One Road policy, which envisages creating the 21st century equivalent of the Silk Road.
The winning of the bid would give China the complete control of one of the fastest-growing container ports in the world, raising concerns about competition at the busiest Greek container gateway.
China is thinking far into the future. Piraeus is the closest port in the northern Mediterranean to the Suez Canal. From here, it can conquer the EU domestic market. Recently, three freight trains began leaving the port each week.
China's major interest in Greece is its strategic assets, such as ports and railways. It is already an important investor. The jewel in the crown is the Mediterranean port of Piraeus, which has served as Athens' shipping base for more than 2,500 years.
However, opinions differ on whether Cosco will be able to grab market share from northern European ports by providing an alternative route into the European interior or would merely provide additional competition for other Mediterranean ports.