One Port, Two Worlds: China Seeks Dominance in Athens Harbor
A Chinese executive with shipping company Cosco has helped transform part of Athen's Port of Piraeus into a success story. The multinational firm now has a controversial plan to acquire the whole facility and put it on track to join the ranks of Hamburg and Rotterdam.
One could argue that China's long path to Piraeus, Greece, began on April 27, 1961. It's the day Mao Zedong founded the communist state's first freight company, the China Ocean Shipping Company (COSCO). The Great Leap Forward, Mao's plan for industrialization, had proven to be a disaster at the time, leaving millions dead or starving. With Cosco, China had its eyes on overseas markets.
Throughout, Fu Cheng Qui, or "Captain Fu," as the chief executive of Cosco's Piraeus subsidiary is called by those who know him, will be closely monitoring the bidding process. Fu has already been in Piraeus for a long time with the company, and he is determined to stay. He has placed the bid on behalf of his company and has little doubt it will be accepted.
In his position, 65-year-old Fu is the guardian of China's gateway to Europe. He may soon control the container piers, cruise-ship terminals and ferry quays of Greece's biggest port.
"The government has changed four times since I have been in Greece," Fu says. "They all always talk a lot. But what counts? Actions count. Actions! Only actions!"
On the way to the cargo port, a small sign indicates a fork in the road -- with one route leading to OLP and the other to PCT. Each to a different world. Pier I belongs to the primarily Greek state-owned OLP port authority. These days, though, most trucks take the other route, to PCT, to pier II and pier III, which is run by Piraeus Container Terminal, a subsidiary of Cosco.
"Just look," Fu says as he steps up to the window. Then the show begins. On Pier II, 11 container gantry cranes are in constant, powerful movement. All are new and made in China. Trucks move across the ground at an interval of only minutes.
Two Worlds Side by Side
A few hundred meters away, on Pier I, the dock is vacant, no ship has arrived.
So far, the Greeks and the Chinese have shared processing responsibilities for the containers of MSC, the large shipping company. But business has collapsed. Since MSC and Maersk, the two market leaders, began their 2M Alliance in January, all of the company's containers are loaded by Cosco on Pier II. "The largest ships happen to be very large," says Fu. "And we are simply twice as fast. We can now complete 36 container movements per hour, and time is money. Look, Pier I is almost empty. That's very sad."
In 2008, Cosco took over the license to operate Pier II for 30 years at a cost of 490 million ($532 million). They were later given another five years, as well as permission to build a third terminal.
Former Greek Shipping Minister Miltiadis Varvitsiotis claimed that the partial privatization of the Athens port had "turned out to be one of the most important and profitable investments of the past few years."
In the span of four years, Cosco has quadrupled container traffic, to just under 3 million units a year. If all goes well, annual capacity will be expanded to 6.2 million containers in 2016. Together with Pier I, that would put it in the same league as Europe's largest ports in Hamburg, Antwerp and Rotterdam.
The former state-owned terminal -- where harbor unions formerly ruled and ancient diesel-powered pallet trucks once drove around -- has been turned into a highly profitable business.
Piraeus has become the story of two worlds -- that of the turbo capitalism of the successors to Mao Zedong on the one side, and a market economy that can move as slowly as a Socialist one on the other. Some people see the port as a symbol of the country's future. It's an image that is a horrific one for many, including a large portion of Syriza voters.
'Cosco Go Home'
Fu has decorated his office, which is located high above the piers, in the spirit of friendship between the people. There are olive branches and peonies, a terracotta warrior and a Poseidon statue as well as models of the Parthenon and the Imperial Palace, all placed harmoniously, side by side. "We are two old cultures," he says. "We have a good relationship with Pier I. We aren't enemies. I have a ship master's certificate, and I know that if a ship sails too fast, its mast breaks."
When Fu wanted to take over Pier II in October 2009, he was welcomed to Athens by a banner emblazoned with the words "Cosco Go Home!" The Dockworkers' Union claimed that the port was going to be taken away from the Greek people and went on a six-week strike. Some of the protesters from the time are now part of the government.
Fu was himself once a member of the Red Guard. During the Cultural Revolution, back in the 1960s, he "of course" brandished the Little Red Book: "Long live Chairman Mao! Long, long live." He can still recite it quite well.
The manager is no stranger to these kinds of protests. "You know, I worked for 15 years in Naples, and know what strikes are. I am a Socialist," says Fu. Does he find that word funny now? No, he says, "I can understand the workers completely. But unfortunately the workers didn't understand us at first."
Fu claims everybody thought he would bring in his own longshoremen, pilots and fitters from China. "I told them, no, this is your company. We are only coming with seven managers." All construction contracts went to Greek companies, he says. "In five years, Cosco hasn't sent a single euro back to China. Everything is being invested! New loading bridges, electric jacking systems!"
At the time, Cosco had bid far higher than market value. Every year, the company transfers approximately 30 million to the Greeks. The Athenian port authority earns more from the concession fee than from its own freight business. With the completion of the 19-meter-deep (62-foot-deep) deep-water port at Pier III, and the modernization of the crane system, Cosco will have invested half a billion euros.
China's Foothold in Europe
But 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. "Those are peanuts, of course," Fu says. "But it's only the beginning."
When Chinese Prime Minister Li Keqiang visited the port in June, Piraeus was described as China's gateway to Europe: China's exports could reach Germany, Hungary and Austria "between seven and 11 days" faster, he said. Huawei, the electronics conglomerate, has already opened a logistics center right at the port.
Fu says it wouldn't be a major disaster for the company if Greece were to leave the euro zone. "We are part of the CKYHE shipping alliance," he explains. "We have holdings in ports in Genoa and Port Said, inside and outside of the euro zone." A Grexit would largely pose an accounting problem -- at least initially.
Currently, around 1,200 Greeks work for Cosco. The company doesn't need to pay union wages, there is no corporate training and the crane-operations staff has been reduced.
Jobs are now awarded by an agency instead of the unions. A port worker earns about 1,200 per month, which is above average for Greece, but only one-third of what wages used to me.
When asked about the unions, Fu describes them as being "superfluous!" "Every employee is like the member of a family," he says. "Everybody works with respect for the other. We listen to what our employees say and react to it. The company is like a family. We are all brothers. Everybody is happy."
That's nice. But the firings, the labor disputes, the claims that employees don't even have the time to use the bathroom? "Nonsense," Fu says, before returning to the issue of principles.
"The union leaders promise their members more money for less work," he says. "How is that supposed to work? If you want a higher salary you first need to work hard. Not lie on the beach and drink beer. Learn from the Germans! Work hard, never be lazy and always work seriously. Hard work -- happy life."
That wasn't exactly Syriza's campaign platform. The week before last, Deputy Greek Prime Minister Giannis Dragasakis traveled to China and declared that his government still wants to privatize the majority of the Piraeus Port Authority. The bidding process could be complete within weeks, he said.
But a short while later, Deputy Shipping Minister Theodoros Dritsas contradicted him. Strategically important property of the state may not be privatized, he said.
"It is difficult to get a clear image. It is all -- political," Fu says, as if spitting out the word. "We can just wait and drink tea. Or coffee. In any case, I want to have this share," he says. "In the spirit of friendship between our two countries."
The market value of the Piraeus Port Authority currently stands at about 270 million. The passenger business and the car ferries to the Greek islands are especially lucrative. With its 18 million passengers, Piraeus is the biggest passenger port in Europe. If it is privatized, people are expecting a sale price significantly higher than its market value. Tsipras' Syriza party itself cited a figure of 500 million to its creditors.
Aside from Cosco, which is considered the front runner, port operators from Denmark, the Philippines, the United States and the United Arab Emirates have expressed interest. If Cosco prevails, Piraeus would then be completely in Chinese hands.
Of course, back in 2008, Alexis Tsipras stood behind the protesting dock workers, with their "Cosco Go Home" message. As prime minister, though, he has to do everything he can to make Fu feel at home.
It's one of the many dilemmas faced by Tsipras. He would like to make himself less dependent on the European Union by bringing China into Greece as an investor. But the Chinese in no way share the leftist and radical views of the Syriza government. Instead they follow Captain Fu's dictum of "Hard work -- happy life." The more China invests, it seems, the more likely it will become that Greece's social gains start to crumble.
A New Monopoly
A few hundred meters from Fu's new world is the office of the Union of Dockworkers, headed by Nick Georgiou. He looks like a man who's carried a lot of sacks, fought lots of battles and smoked too many cigarettes. He's also a man who wouldn't describe the conditions at Pier II as being one big happy family.
Georgiou speaks of work accidents that have been covered up, a lack of emergency vehicles, neo-Nazi members of the Golden Dawn making themselves at home on the Chinese side of the pier. But he blames the troika as being the true culprits. "The EU has wanted to push through the liberalization with the port workers," he says. "Cosco is merely the means to an end." Since the Chinese began running the port, the wages in the Greek-run part have gone down as well.
For his part, Georgiou doesn't want to accept that his company, the Piraeus Port Authority, derived one-third of its income over the past year from rental fees paid by Cosco. He takes a long drag of his cigarette, before adding, "Piraeus was partly privatized back then in order to break up a monopoly. Now the rest is also supposed to be sold. Then we'll have a monopoly again, but a Chinese one."
The ancient Greek name of the island is Salamis. This is where the biggest naval battle in Antiquity was fought between Greeks and Persians -- in what would become a central event in the history of European civilization and for the power relations between the West and the East.
Back then, the Greeks won.
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