Greece’s ports, railways and logistics centres have already put the nation firmly on the map as a major hub for global commerce and a vital link between Europe and Asia. Developing this further is crucial to the nation’s growth and there is already significant investment in a number of projects, from both national and foreign investors underway. These projects are expected to reach fulfillment and deliver returns over the coming years.

The key to the structural changes in combining Greece’s transport and logistics centres is the privatisation of the two largest ports in Greece, Piraeus and Thessaloniki; TRAINOSE, who hold the lease to operate the railways, and Egnatia Odos – the motorway that connects Turkey and the Balkan countries with Italy through Greece.

These state-owned assets have attracted global investment interest through the public assets privatisation and development programme run by the Hellenic Republic Asset Development Fund (HRADF) and the new sovereign fund – the Hellenic Corporation of Assets and Participations.

The ports

The sale of the majority of OLP shares (the Piraeus Port Authority) to the China Ocean Shipping (Group) Company (COSCO) in August 2016 creates a gateway for Asian and European commerce to operate through Greece. The COSCO will proceed with investments that may exceed 500m euros out of which 350m euros are mandatory investments according to the sale agreement of 67% of OLP shares from HRADF.

For 2017 only, COSCO has opted to proceed with infrastructure and upgrading projects of 140m euros in OLP. The plan includes, among others, investments of 30m euros for the upgrading of the ship repair zone, including acquisition of equipment and construction of facilities – a move that constitutes a major progress for the revival of Greek shipyards. The plan also includes investments of 3m euros for the development of a state-of-the-art logistics centre in an area of 12,000 sqm. The connection to the port will take place through an underground motorway that is estimated to cost an extra 5m euros. Thirty-million euros has been budgeted for the upgrading of the car terminal and 3m euros is initially required to begin the construction of the new cruise-liner terminal, with 130m euros required for its completion.

The binding offers for the acquisition of 67% of the Thessaloniki Port Authority – OLTH share capital are due to be submitted by February 2017 (THPA – OLTH is the company that operates the port of Thessaloniki). It is the second biggest port in the country and is located in the most strategic position for the transportation of goods from northern Greece to the Balkan countries and Central Europe.

Participants in the tender include investment groups and consortiums from all over the world, including: APM Terminals, Deutsche Invest Equity Partners, Duferco Participations Holding, International Container Terminal Services Inc., Mitsui & Co. from Japan, P&O Steam Navigation Company from the Dubai DP World Group and the Greek GEK TERNA.

With the connection of the two major ports through TRAINOSE, utilising the commercial routes to Central Europe is a challenge for the investors.

Railways

The railway network constitutes the basic infrastructure from which the rest of the transport and logistics links will be developed and is a major growth priority for Greece.

To begin with, this entails railway connections between all major ports in the country and the logistics centres. This is the strategic aim behind the upcoming sale of 100% of share capital of TRAINOSE to the Italian group Ferrovie Dello Stato Italiane. Ferrovie is expected to increase commercial transport links (since the market is now liberated) as well as passenger transportation and has already raised 1bn euros funding to proceed with investments and upgrade the network.

Major motorway project

Another major project key to synchronising transport links in Greece is the concession of Egnatia Odos – the motorway that crosses northern Greece, from east to west, starting at the Igoumenitsa port, connecting Greece and Italy and ending at the Greek-Turkish borders. In addition, it constitutes vital transport links between the Balkans and south-eastern Europe, as the Pan-European Corridors IV (Berlin – Sofia – Thessaloniki), IX (Helsinki – Alexandroupolis) and X (Vienna – Belgrade – Thessaloniki) all end at Egnatia Odos.

At the beginning of 2017 HRADF will quickly proceed with the announcement of the tender for Egnatia Odos. It will conclude the concession agreement for its operation, maintenance and utilisation with a private investment scheme.

Logistic centres

A broad and integrated network of logistics centres will be developed in major cities and hubs including Athens, Thessaloniki, Igoumenitsa, Alexandroupolis, bringing to life the national strategic transport plan. There are significant investment opportunities here and participation from the private sector is certain.

To begin with, the International Logistics Center at Thriasio in Attica (588,000 sqm), which following an international tender, is to be constructed and operated by the joint venture ‘ETVA VIPE – GOLDAIR CARGO’ following a concession agreement for 50 years. The investment is estimated to exceed 250m euros – during the first two years 120,000 sqm will be constructed, with 240,000 sqm to be constructed between the second and tenth year of the concession.

Also, discussions between the real estate company for railways, GAIAOSE, HRADF and the Thessaloniki Port Authority are at an advanced stage and the construction of a giant 672,000 sqm logistics centre in Thessaloniki is ready to commence.

In fact, there has been prominent interest from American investors, given the strategic location of Thessaloniki on the Balkan Peninsula. Since the majority of international cargo transported by OLTH is bulk goods, raw materials, or general cargo, it is important that there is a large area for temporary storage and intermediary processing, and those requirements are met successfully in the area owned by GAIAOSE.

The Thesprotia Logistics Center in Igoumenitsa, that may comprise the commercial hub with Italy, has also entered the final stage. After the submission of the relevant proposal by the Igoumenitsa Port Authority, the project is included in those pre-approved by the European Commission, to be funded with 6-7m euros from the programme ‘Connecting Europe’.

Further information
www.hradf.gr