Cosco sets sights on Cypriot port of Limassol, another key to its bid to create a modern commercial superhighway for Chinese goods

Fresh from success in securing control of the Piraeus Port Authority SA in Greece, Chinese shipping giant Cosco is also bidding to run the port of Limassol on the divided island of Cyprus in a bid to extend its reach in the Mediterranean Sea.

Cosco was among investors who expressed interest in running the container terminal and the multipurpose terminal, according to a senior source in the Cypriot government. The Ministry of Transport, Communications and Works said on Jan 21 that 14 investors had placed bids for three concession opportunities.

Cosco is one of the six bidders for the port's container terminal and one of five vying for the multipurpose terminal, according to the source. Another three companies have placed bids to run a marine services concession, according to the statement.

Other companies interested in the concession opportunities at the Cypriot port are DB World of Dubai and Philippines-based International Container Terminal Services Inc, the source said.

Cosco's interest in the Limassol port came after it was declared the preferred, and only, bidder for a controlling stake in Piraeus Port, Greece's biggest harbor and one of the largest in the Mediterranean.

Cosco increased an initial offer in response to a Greek request and will pay 368.5 million euros ($399.7 million) for a 67 percent stake in Piraeus, a gateway that is key to China's plans to create a modern commercial empire pumping Chinese goods throughout Europe.

Limassol Port is the main port of the Republic of Cyprus, serving most of the island's seaborne cargo and passenger traffic. The port accounts for nearly all container traffic, about half of the total cargo and 75 percent of the passenger traffic on the island, according to the tender documents.

Andreas Michaelides, the general director of the ministry, said in the Jan 21 statement that the country's aim was to make the port of Limassol a "gateway for development for the future".

The Cypriots hope to draw investment to a port that may well be able to offer hydrocarbon support services in the future to support a burgeoning offshore oil and gas industry in the region, considered instrumental to Cyprus' future economic development.

Chinese Foreign Minister Wang Yi said during a visit to Nicosia in December that China was interested in operating Cypriot ports and wanted to help turn the eastern Mediterranean island nation into a regional shipping hub, AP reported at the time.

Chinese investment in the region is a key part of China's Belt and Road Initiative, which envisages creating the 21st century land and maritime equivalents of the Silk Road. Since the Chinese shipping behemoth started container operations in Greece in 2009, traffic has surged at Piraeus, making the harbor one of the fastest-growing ports in the world.

Cyprus has been divided since 1974, when Turkey invaded in response to an abortive coup by a Greek military regime to unite the island with Greece. Limassol port evolved into the internationally recognized Republic of Cyprus' biggest port following the division of the island, when the port of Famagusta, Cyprus' main port for centuries, fell under the control of Turkish forces.

Hiving off licenses for the port's activities is part of the terms of the 10 billion euro bailout the country agreed with European partners and the International Monetary Fund in 2013. The bailout came after Greece's debt restructuring imposed losses on Cypriot banks, forcing the country to seek international aid, impose capital controls and seize deposits at the country's two biggest banks.

But Cyprus has adhered faithfully to the terms set by lenders and is on track to exit its bailout program on time in March, Finance Minister Haris Georgiades told European parliamentarians in Brussels.

Preferred bidders for the port concessions are to be announced before the end of March, according to the statement.

For China Daily

(China Daily European Weekly 02/05/2016 page29)