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China Considers A New Silk Road Role For Italy’s Palermo Port

China considers a new Silk Road role for Italy’s Palermo port

Palermo, Sicily, Italy (PortSEurope) March 14, 2019 – Chinese President Xi Jinping is scheduled to visit Italy March 22-23, and after Rome will visit the Sicilian port and city of Palermo. Palermo port, part of Autorita’ di Sistema Portuale del Mare di Sicilia Occidentale (AdSP – Western Sicilian Sea Port Authority), is located in the northwest of the island of Sicily, on the Gulf of
Palermo in the Tyrrhenian Sea, in the middle of the Mediterranean Sea. It handles cargo, cruise ships and is the location of a Fincantieri SpA shipyard. Palermo-based Istmo srl has been working on a plan which detailed how investment could increase the port’s handling capacity from a current level of around 10,000 TEU to 16 million TEU, which is higher than Rotterdam’s current TEU traffic. An estimated €5 billion ($5.67 billion) investment would be required. It has been reported that a delegation of Chinese officials met with Eurispes (Istituto di Studi Politici, Economici e Sociali), an institute of political, economic and social studies, to discuss the project, which could become a hub on the new Silk Road. The new Silk Road (One Belt, One Road) is a Chinese economic strategy to seek better access for Chinese-made products in European markets, which includes acquiring stakes in ports and other transport facilities. The development would come at a good time for Palermo and Sicily, but would also raise further concerns about Chinese investment in European transport facilities.Officials in Brussels and Washington have indicated growing concern about China’s investment in European transport facilities, particularly in the seaports and logistics sectors. China’s COSCO Shipping Ports Limited manages Piraeus Port Authority SA (PPA) in Greece, and despite increased traffic and profitability, there are concerns about the level of investments in activities not directly related to traditional port activities, such as hotels and retail facilities, and the effects on local businesses. Last month, PPA signed a memorandum of understanding (MoU) with the Italian port authority that manages the ports of Venice and Chioggia. Also, Genoa port is expected to sign a memorandum for the establishment of a joint venture with China Communications Construction Company (CCCC) on March 23. This comes at a time when the European Union (EU) has proposed new investment screening measures for foreign state-owned companies that want to purchase interests in European harbours. Since the start of the 21st century, Chinese companies have acquired stakes in some 15 ports in Europe, that handle more than 10% of shipping containers traffic to and from the Old Continent, according to the Paris-based Organisation for Economic Cooperation and Development (OECD). The state owned COSCO Shipping Ports and China Merchants Port Holdings have acquired stakes in: Port Said, Egypt; Casablanca and Tangier, Morocco; Marsaxlokk, Malta; Istanbul, Turkey; Piraeus, Greece; Bilbao and Valencia, Spain; Marseille, Nantes, Le Havre and Dunkirk, all France; Antwerp and Bruges, both Belgium, and Rotterdam in the Netherlands. Chinese companies have participated in the construction and operation of 42 ports in 34 countries under its Belt and Road initiative launched in 2013. China has also signed 38 bilateral and regional maritime agreements covering 47 countries along the Belt and Road trade routes. The key strategy of COSCO and other Chinese companies is to invest in smaller European seaports and then try to develop them. Copyright (C) PortSEurope. All Rights Reserved. 2019.

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