Analysis – Is Alexandroupolis port the new trump card in the Trump administration’s Mediterranean Great Game?

Alexandroupolis, Greece (Ports Europe) March 10, 2020 - On March 7, 2020, U.S. Ambassador Geoffrey Pyatt and Deputy Assistant Secretary at U.S. Department of State - Bureau of European and Eurasian Affairs Matthew Matt Palmer, together with Greek Minister of Transport Kostas Karamanlis, visited the port of Alexandroupolis, and all indications are that Washington is stepping up interest in the port's future and a role for U.S. companies in the forthcoming privatisation of the port. Speaking at the headquarters of the Port Authority of Alexandroupolis, Ambassador Pyatt said that their presence at the port was, "a reflection of the strong strategic focus that the U.S. government has placed on Alexandroupoli". He went on to say that he was optimistic about the prospects of working with Prime Minister Kyriakos Mitsotakis’ government to participate and complete projects including the privatization of the port, in which there is strong American private sector interest; the execution of the Floating Regassification Unit in Alexandroupoli; the implementation of the IGB and TAP pipelines, and Alexandroupoli developing a major logistics and transshipment point for the East Mediterranean region. Following a delay, the port is now set to be privatised in June this year, and Washington would like to see U.S. companies involved. Last month, Goldair Group Chairman and Chief Executive Officer, Kallinikos Kallinikos, and Strategic Investments Director, Vassilis Maglaras, met with the U.S. Ambassador to Greece, Jeffrey Pyatt, in Athens. Naftemporiki, a local newspaper, reported that Goldair executives also met with U.S. transport multinational SSA Marine and the Black Summit Financial Group investment fund with a view to forming a consortium to bid for regional port privatisation tenders. SSA Marine is a member of the Anaklia Development Consortium (ADC) with TBC Holding from Georgia, Conti International (U.S.), British Wondernet Express working in Central Asia, and G-Star Ltd. from Bulgaria (the company has Georgian owners and seems to operate as an offshore investment vehicle). ADC was set up to construct and develop Anaklia deep sea port on the Black Sea coast of Northern Georgia. Earlier this year, the Tbilisi government decided to cancel the contract with the Anaklia Development Consortium (ADC) and to launch the required legal procedures. Last month, Maya Tskitishvili, Georgian Minister of Regional Development and Infrastructure, said that the government was seeking a new investor for the project and a further tender was being planned. This year, the Anaklia project has experienced problems with raising finance, interest in the development a deep sea port in neighbouring Poti, behind the scene opposition against the project by Russia and the role of the Georgian government. During the visit to Alexandroupolis port, Ambassador Pyatt added that he supported the Greek government's steps to start road and rail interconnection projects, as well as the Egnatia Odos port works and the upgrading the railway section to Ormenio, which will improve transport links with the Bulgarian ports of Burgas and Varna on the Black Seacoast of Bulgaria. A further Washington interest in the port is the revised mutual defence cooperation agreement signed last October which will increase Athens' strategic value and likely lead to U.S. investments in Greek military facilities. As part of the deal, U.S. armed forces are expected to expand the Sixth Fleet's base on the southern Greek island of Crete and set up drone bases and permanent helicopter training facilities in elsewhere in Greece. Regarding Alexandroupolis port, the U.S. plans a new naval and air force base in the city of Alexandroupoli to connect with NATO allies Bulgaria and Romania, making redundant the current route through the Bosphorus, controlled by Turkey and likely dependent on the erratic behaviour of its President Recep Tayyip Erdogan. The implementation of the Gas Interconnector Greece – Bulgaria (IGB) and Trans Adriatic Pipeline (TAP) pipelines are changing the energy map of southeastern Europe. Together with the Floating Regassification Unit in Alexandroupoli, these developments will play a major role in reinforcing the energy security and independence of the countries of southeastern Europe. The port of Alexandroupolis could become an import hub for U.S liquified natural gas (LNG), which would challenge Russia’s role of almost dominant energy supplier in the region. Regarding privatisation of the port, Karamanlis said that the project would start in the first half of the year. According to the Minister of Infrastructure, the second project is at a very early stage and concerns the rail connection and electrification of the railway from Alexandroupolis to Ormenio. As he explained, the project will be auctioned in the next 18 months. The Greek privatisation agency, the Hellenic Republic Asset Development Fund (HRADF) is responsible for privatising Greek state-owned assets, including a portfolio of 10 ports in the form of sociétés anonymes - the ports of Volos, Rafina, Igoumenitsa, Patras, Alexandroupolis, Heraklion, Elefsina, Lavrion, Corfu and Kavala. The American interest in the Alexandroupolis port is another confirmation of Washington's efforts to counter the fast-growing influence of China, Russia and Iran in the Mediterranean Sea. Greece’s Piraeus Port Authority is operated by China’s COSCO Shipping Ports Limited. Piraeus is the fastest growing container port in the world, which should become the gateway to Europe for China. The project is part of the One Belt, One Road initiative that President Xi Jinping announced in 2013, China’s New Silk Road. Piraeus is “the head of the dragon” in Europe – as Chinese analysts describe the importance of the port. The Chinese want to invest about €1 billion ($1.1 billion) in Piraeus. This includes the construction of a new cruise terminal, so that Piraeus will be able to service four mega-cruise ships at the same time. Also planned is the construction of four hotels and a shopping mall on the harbour grounds. Behind this is the plan to make Piraeus more attractive as a “home port” for Mediterranean cruises. So far, most shipping companies leave their ships in Italy and Spain. Russia is going to invest $500 million over four years in the Syrian Mediterranean port of Tartus that it controls via a 49-year lease contract, signed in April last year, Yuri Borisov, Russian deputy prime minister said. This is by far the largest ever Russian investment in Syria where Moscow is looking to cement its influence. The agreement to lease Tartus was provisionally reached in 2018 and use of the port gives Russia influence in the Eastern Mediterranean. It also allows the Russian navy to expand its technical support and logistics base, located on the northern edge of the port of Tartus. With Tartus port on Syria’s Eastern Mediterranean Sea coast, Russian naval vessels no longer need to return to Russian ports in the Black Sea via the Bosphorus Strait to collect supplies. Tartus is the Russian navy’s only Mediterranean port facility and Russia’s only military base outside the former Soviet Union. In the Syrian civil war, Russia sided with and saved, the regime in Damascus, and the port is a benefit of this strategy. Defying pressure from Moscow, Russia’s dependant Syria has signed in February an agreement on maritime cooperation with Iran, which reportedly includes conditions for the presence of Iranian port operators in Syrian ports and the implementation of the provisions of the Memorandum of Understanding (MoU) between the port of Imam Khomeini in Iran and the port of Latakia in Syria. Iran has been repeatedly asking Syria for access to its ports, due to Israeli airstrikes against its shipments using Syria’s roads and airports, but under Russian pressure, Damascus has not cooperated. As of October 2019, Tehran has its own port, Latakia, which will help it move goods (according to Israel, including weapons) towards Lebanon. A foothold in Latakia fulfils a decades-long Iranian dream of having direct access to the Mediterranean Sea, from where it can ship goods, arms and political influence globally. Copyright (C) Ports Europe. All Rights Reserved. 2020.

Analysis – Is Alexandroupolis port the new trump card in the Trump administration’s Mediterranean Great Game?

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Analysis – Is Alexandroupolis port the new trump card in the Trump administration’s Mediterranean Great Game?

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The Economist: Europe’s ports are drug hubs

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