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Greek government makes statement on regional port privatisation

Statement by the Minister of Shipping and Island Policy on the exploitation of regional ports by the method of sub-porting to investors

March 3, 2019

(Abstracted and translated from Greek language)

The Minister of Shipping and Islands Policy Fotis Kouvelis, in a statement regarding the safeguarding of the rights of the workers in the specific port authorities and ensuring their viability and public character, said: 

“The government’s political decision regarding the 10 regional ports (Alexandroupolis, Kavala, Corfu, Igoumenitsa, Patras, Heraklion, Volos, Rafina, Lavrion and Elefsina), the majority share of which belongs to the Hellenic Republic Asset Development Fund (HRADF/TAIPED), responsible for privatising Greek state-owned assets, is not to wholly privatise the ports which will remain under public control.

According to the provisions of the law, the staff regulations, internal organization and operational regulations of the port authorities remain in force after the conclusion of the sub-concession contractsFollowing the conclusion of the subcontracting agreements, the employment relationships of port authorities’ personnel are still governed by the provisions of the Free Collective Bargaining Act. At the same time, their fees are determined by the Business Collective Labour Agreements concluded by the port authorities with the trade union organizations of the employees, according to the provisions of the law.

With regard to ensuring the viability of port authorities, it is possible to conclude project contracts between the agencies and the investors, who are allowed instead of subcontractors to choose their port authority to provide the port services undertaken.

In the case of the conclusion of these contracts:

  • Workers conditions to be maintained
  • Port authorities to received additional revenue to cover operating costs and the maintenance of unlicensed port infrastructure in order to ensure the viability of the port authorities for the benefit of the State.

In addition, to ensure the viability of the Agencies, it is explicitly stipulated that the investor is to be subject to an annual compensation fee in favour of the Port Authority concerned. The fee is expressed as a percentage of the investor’s annual gross income, with a maximum of five per cent (5%) and the possibility of exceeding it if objectively substantiated that otherwise the viability of the Port Authority concerned is at stake.”

PortSEurope note: The Greek government has started debating the issue of regional port privatisation which could lead the Hellenic Republic Asset Development Fund (HRADF) to start the process.

The portfolio includes 10 ports in the form of sociétés anonymes, the ports of Volos, Rafina, Igoumenitsa, Patras, Alexandroupolis, Heraklion, Elefsina, Lavrion, Corfu and Kavala. HRADF holds 100% of the shares in the aforementioned port companies which have the right to operate the respective ports until 2042.

In the last two years, the Piraeus and Thessaloniki port authorities were sold via the sale of majority stakes. The process for regional ports is likely to be by awarding sub-concessions for individual activities such as cruise, freight and cabotage.

A concession process is expected to begin with the ports in northern Greece – cargo business concessions in Alexandroupolis and Kavala.

In the case of the port of Alexandroupolis, privatisation will help enable the port develop an as energy hub in the region. The U.S. government has shown interest in the port for both economic and geopolitical reasons.

This will be followed by the ports of Igoumenitsa, Volos (possible cargo concessions) and Corfu (cruise ship concession).

The privatisation of the ports at Rafina, Iraklio, Patra, Lavrio and Elefsina is expected after 2020.

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