Shanghai-based multinational Cosco is gradually unveiling its plan to transform the port of Piraeus into a genuine home port hub for holiday cruises throughout the eastern Mediterranean – a decades-old goal for Greece’s all-important tourism industry that repeatedly clashed with the country’s proverbial "red tape" and the protectionist regime of cabotage.
By A. Tsiblakis
Shanghai-based multinational Cosco is gradually unveiling its plan to transform the port of Piraeus into a genuine home port hub for holiday cruises throughout the eastern Mediterranean – a decades-old goal for Greece’s all-important tourism industry that repeatedly clashed with the country’s proverbial "red tape" and the protectionist regime of cabotage.
Given that as of August 2016 state-controlled Cosco owns a majority stake of the Piraeus Port Authority (OLP) and holds its management, the oft-cited priority of turning Piraeus into a cruise cluster appears to be taking shape. The goal is to lure and keep international cruise ship operators based in Piraeus and to generously tap the massive Chinese market for overseas holidays, especially the increasingly popular cruise packages.
While cabotage and the Greek state’s choke hold over the port of Piraeus fell “victims” to the economic crisis and the subsequent bailout memorandums, which mandated privatizations and a liberalization of the goods and services markets, another specter popped up in the eastern Mediterranean, namely, political instability (Turkey) and even outright war in the Middle East.
According to reports, many cruise operators with home ports in Italy are eyeing a reduction of their presence in the Aegean, while at the same time increasing routes in the Caribbean, particularly due to a “thaw” in Cuba’s economic policy, as well as in Asia and northern Europe.
The latest figures show that while Greece dodged any Turkey-related damage to the cruise sector in 2016, the fallout will be felt in 2017, with reduced cruise ship itineraries to Grecian destinations calculated at between 25 to 30 percent.
According to reports by “N”, the Chinese shipping giant has actively courted global cruise ship operators to overturn this forecast and keep operators active in Greek waters. One incentive, according to reports, is to link market share in the emerging Asian cruise sector with continued activity in the Aegean.
Essentially, Cosco executives are offering to exchange concessions on their home turf for guarantees that cruise operators will increasingly use Piraeus as a home port for their east Mediterranean operations. An extra incentive, according to the Cosco side, is a major advertising campaign in China aimed at affluent holiday-makers for cruise vacations in Greece.
According to information gleaned by “N”, the world’s biggest cruise ship operator, Carnival, has already expressed an interest in assuming the entire concession of a new 130-million-euro cruise ship terminal that Cosco will build in Piraeus.
The projected terminal will be able to service the biggest cruise vessels in the world, mammoth ships that host up to 5,000 passengers.
Nevertheless, other reports from Greece’s biggest and busiest port hold that Cosco wants strategic cooperation with as many major cruise ship operators as possible.
The continuing challenge for Cosco’s business plan, as far as the cruise sector in Piraeus is concerned, is the fact that the biggest Mediterranean operators – MSC and Costa, for instance – as well as the world’s second biggest cruise ship line, Royal Caribbean, have home ports in Italy.
What the cruise companies point to in hesitating to add more Aegean routes is a lack of high-end organization dock-side and inferior infrastructure at a host of island destinations.
Cosco’s response is to propose the development of a “cluster cruise” option, where the Piraeus Port Authority is the leader.
The idea, while still at a formative stage, is to group together six to eight popular destinations, in order to avoid gaps in onshore organization and lacking infrastructure throughout the Aegean.
Finally, “N” has learned that Cosco-OLP is not planning to expand as an investor to other Greek cruise ship ports, although it has not ruled out the prospect of joining a consortium that would invest and exploit new port facilities around the country.