Thessaloniki, Greece (PortSEurope) May 19, 2019 – After acquiring 67% of the second largest Greek port of Thessaloniki in March 2018, the consortium of new owners South Europe Gateway Thessaloniki (SEGT) are advancing their investment program, and aiming to build a transport hub linking the Mediterranean with the Balkan countries.
Indirectly, both Russia and China have stakes and interests in the port, which has raised concerns in the European Union and the USA, and the port has become the subject of wide geo-political interest. The Chinese government continues to invest in port facilities as part of its new Silk Road policy, and the Brussels and Washington have been highly supportive of the newly-named Republic of North Macedonia and its entry into the North Atlantic Treaty Organization (NATO). At the same time, Russia has been trying to develop its political and business links to the Balkan and central European countries which were previously under the hegemony of the former Soviet Union.
SEGT includes Germany’s Deutsche Invest Equity Partners (DIEP) with 47%; France’s CMA CGM (Terminal Link) with 33% and Savvidis Group (Cyprus-registered Belterra Investments) with 20%. Terminal Link is 49% owned by China Merchants Port Holding, which is controlled by the Chinese state.
SEGT paid €232 million ($287 million), but the full benefit of the deal for Thessaloniki Port Authority SA (ThPA) will amount to €1.1 billion ($1.36 billion) as it also includes the consortium’s commitment to invest €180 million in the next seven years, capitalising on the port’s location as an export gate for the wider Balkan area (especially for the landlocked Serbia, Northern Macedonia and Kosovo).
The SEGT consortium members have agreed to spend €650 million on upgrading the port’s facilities over the 34-year concession. The facilities have not had a major upgrade since the 1990s.
The focus of attention in Greek’s ports privatisation is on the port of Piraeus, taken over by China’s state owned COSCO, which has invested €550 million in its development, while Thessaloniki operates under the radar, but quietly builds portfolio of clients in Bulgaria and in the former Yugoslav republics and aims to become the greatest transit hub in the Aegean Sea.
Executive Chairman and CEO of the Thessaloniki Port Authority is Sotiris Theofanis, who was previously its CEO from 1999-2002. From 2002 to 2004, he was a CEO of Piraeus Port Authority SA.
The main focus of the €180 million investment in the port of Thessaloniki, expected to be completed ahead of schedule for under five years, is the extension of the container terminal by 440 metres and dredging works that will increase the port’s depth to 16.5 metres, which is strategic in providing a berthing place to accommodate so-called New Panamax vessels especially the ships coming from East Asia.
The port also plans to develop a freight centre, to be tendered by Greek state-owned railway property management and development company GAIAOSE, and the cruise tourism sector.
It has already been announced that a new area of 26,000 m² will be available for the temporary storage of containers to be exported, which is part of the gradual redesign of the overall operation of the container terminal and of the new investment program.
Of the investment, €130 million has been allocated to 6th Pier projects, €30 million to equipment for the container station and the dry cargo facility and €20 million for static reinforcement at the old customs office, as well as other port development projects. Improved facilities will enable the port to handle larger vessels and thus increase container volumes.
In 2018, 424,000 TEUs were transported to the container terminal and 3,764,000 tonnes to the conventional port, an increase of 5.5% in both sectors compared to 2017, as announced recently. The current capitalisation of ThPA in the Athens Stock Exchange is €260 million.
The agreement does not include the sale of port infrastructure, which has been leased to the Thessaloniki Port Authority via a concession until 2051.
The port of Thessaloniki is of prime strategic importance for the North Atlantic Treaty Organisation (NATO), as well as the Russians and the European Union (EU). It is the connecting link between Asia and Europe, by-passing the Turkish Straits (Bosphorus).
Not much attention and concern was paid even by the specialised media on Chinese involvement in the privatisation of both Piraeus and Thessaloniki ports. But even less information was published about the Russian link in the privatisation of the Port of Thessaloniki – Belterra Investments, owned by billionaire Greek-Russian Ivan Savvidis.
He is considered to be from the inner circle of Russian President Vladimir Putin, alleged to have tried to influence government policy and is said to have the ear of Greek Prime Minister and radical left SYRIZA leader Alexis Tsipras.
Savvidis, 61, who made his fortune in agriculture and tobacco in southern Russia, is owner of the Thessaloniki’s PAOK soccer team and has had an arrest warrant (but has never been detained) issued against him for bringing a gun onto the field to protest a referee’s decision.
Over the past decade, Savvidis has invested in northern Greek businesses, some on the brink of collapse, as well as in media – television stations and newspapers – that are generally supportive of SYRIZA. Allegedly, he has been using his wealth and connections, despite not being fluent in Greek, to carry out what critics describe as double-dealing for Russia.
Media publications, that cannot be independently verified, claim that Savvidis seems to have a lot of influence in Thessaloniki, and that U.S. and Greek officials believe he’s a straw man for Russian President Putin’s interest in the country and the Balkans.
The New York Times newspaper said that U.S. officials in June intercepted communications showing Savvidis was working as Russia’s agent to undermine the name deal with the Former Yugoslav Republic of Macedonia (FYROM), which the West strongly backed to gain entry for what would become North Macedonia into NATO as a bulwark against growing Russian interests in the Balkans.
A senior U.S. official told the New York Times that U.S. agencies were able to easily collect financial data that put Savvidis behind payments to citizens and soccer fans to incite violence against the FYROM referendum for the country’s name change.
According to the Organized Crime and Corruption Reporting Project, an investigative reporting organisation, Savvidis paid opponents of the campaign to rename FYROM at least €300,000. Savvidis strongly denied all charges. He was a member of Putin’s party, United Russia, when he was in the Duma, the lower House of Russia’s Parliament.
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