Logistics
Basic Information
Chinese name: 比雷埃夫斯港
Location: Piraeus, Greece
Type of Project: Logistics
Project Developer(s): COSCO Shipping (Hong Kong) Company Limited
Main Contractor(s): COSCO Shipping (Hong Kong) Company Limited; Piraeus Container Terminal Single Member S.A. (PCT), a fully controlled subsidiary of COSCO Shipping Ports Limited.
Known Financiers: n/a
Cost: Approximately 1 billion USD
Project Status: Operational since 2009
Project Outline
On 1 October 2009, following an international tender that was concluded a year earlier, COSCO Pacific Limited, a subsidiary of the state-owned China Ocean Shipping Company (COSCO) and one of the largest port operators in the world, assumed the right to operate container Pier II and construct and operate container Pier III for 35 years at the Port of Piraeus (Law 3755/2009). A new COSCO subsidiary, the Piraeus Container Terminal Single Member S.A. (PCT), was created to run the two container piers. In 2013, the construction of Pier III was concluded, bringing the total container capacity of the two terminals to 6.2 million 20-foot equivalent units (TEUs).
The 2009 Concession Agreement between COSCO and the Piraeus Port Authority (PPA), which was then publicly owned, did not involve a Chinese loan, with COSCO paying the PPA an initial 50 million EUR and an annual fee based on a complex formula that reflected the fulfilment of COSCO’s construction obligations and annual container flows (Law 3755/2009 Section 4). As part of the agreement, the PPA committed to not develop other container piers, including Pier I, which remained under its control.
The 2009 Concession Agreement was revised in 2011 and 2014, through ‘Amicable Dispute Settlements’ that protected COSCO’s profitability during the Greek financial crisis. The first settlement (Article 327, Law 4072/2012) adjusted—favourably for PCT–COSCO—the implementation schedule of its port infrastructure upgrade obligations and the payment terms for the annual fixed compensation (known as ‘Guaranteed Consideration’) to the PPA. The second settlement (Article 18, Law 4315/2014), among other favourable clauses, suspended the PCT’s payment of annual compensation to the PPA until Greek gross domestic product (GDP) returned to 2008 levels. Through these two settlements, the Greek authorities minimised COSCO’s financial risk during the peak of the crisis and set the stage for the PPA’s privatisation.
In 2016, the Greek Government privatised the PPA as part of a third bailout agreement with the International Monetary Fund (IMF), the European Central Bank, and the European Commission. The 2009 agreement, along with the Amicable Dispute Settlements of 2011 and 2014 mentioned above, created such favourable conditions for COSCO’s container operations in Piraeus that no other bidders participated in the international tender for the PPA’s privatisation. COSCO was granted an initial 51 per cent stake in the PPA under the 2016 privatisation agreement (Law 4404/2016), which increased to 67 per cent in 2021.
Why did Greece adopt such an accommodating stance towards COSCO? Some scholars have argued that Greek foreign policy towards China was captured by members of the powerful Greek shipping community seeking to advance their business interests through the state; others have highlighted the role of political elites in Greece and China, particularly the geo-economic and geopolitical calculations behind the decision to entrench COSCO’s presence in Piraeus. However, both sides agree that Greek shipowners, who have invested more than 50 billion USD in Chinese shipyards, building more than 1,500 vessels since 2000, played a crucial role in facilitating COSCO’s 2009 entry into Piraeus.
Initially, local attitudes towards COSCO followed a predictable pattern. The business community in Piraeus embraced COSCO’s arrival with enthusiasm, anticipating enhanced business opportunities and economic growth. In contrast, labour unions reacted with hostility, concerned about the potential ‘Sinification’ of labour relations in the port, which they feared could lead to job losses, increased casualisation, and wage reductions. Interestingly, over the 15 years of COSCO’s presence in Piraeus, the expectations and fears of these groups have been somehow reversed. The business community—once optimistic—has grown increasingly cautious about COSCO’s monopolistic tendencies in various business activities. In contrast, labour unions—though initially apprehensive—have gradually compromised with COSCO’s presence and have successfully improved labour conditions in the port’s most deregulated operations.
Project Impacts
Employment and labour rights: COSCO’s 2009 entry into the port resulted in segmentation of the labour force and the creation of a highly deregulated working environment in the cargo piers controlled by PCT. Following successive labour mobilisations, improvements were achieved in working conditions, health and safety measures, and unionisation. PPA workers have retained their employment conditions since the 2016 privatisation.
Environment: The increase in the port’s operations has had environmental and public health repercussions, but the primary catalyst for social resistance to COSCO has been the planned expansion of the cruise-ship terminal. This project has sparked significant opposition due to its potential to cause severe air pollution and destruction of the marine environment if completed.
Local businesses: While initially supportive of the PPA’s privatisation and eager for growth and increased business opportunities, local businesses have faced challenges due to COSCO’s monopolistic practices in key sections of economic activity in Piraeus, including logistics, ship repair, real estate, and retail. Additionally, arbitrary fee policies imposed by COSCO on vessels have caused significant frustration and discontent among parts of the shipping community.
Governance: COSCO’s entry into Piraeus exposed existing local governance issues, particularly in the inconsistent application of European regulations by local authorities, but also contradictions in EU development priorities. The Greek Government has undermined the rule of law by enabling COSCO to engage in activities harmful to public health and the environment, while these same projects receive funding from the European Union.
The importance of the port to both Greece and the City of Piraeus cannot be overstated. Apart from employing more than 3,000 people—including dockworkers and office and other auxiliary personnel—the port supports either directly or indirectly businesses and thousands of jobs in other industries, such as shipping, logistics, ship repair, tourism, real estate, and retail. This underscores the port’s significance for both the local and the national economy. The port’s direct contribution to Greek GDP is about 0.8 per cent.
Following the 2009 concession of cargo piers II and III to PCT, labour issues quickly became a point of contention as working conditions across the port’s different cargo piers diverged sharply. In the publicly owned container pier (I), dockworkers maintained their established contracts and benefits; however, in the PCT piers (II and III), the workforce experienced harsh neoliberal labour practices that were atypical of European port standards. Workers were hired through local labour contractors on what amounted to zero-hour contracts and were asked to work 16-hour back-to-back shifts. Health and safety standards were poor, while attempts to unionise were suppressed, creating a stark contrast between different cargo piers in the same port. The poor working conditions at PCT piers triggered a wave of mobilisations and strikes starting in 2014. While COSCO initially avoided direct negotiations with workers, pressure from the strikes led to improvements in working conditions and resulted in the formation of the ENEDEP union by PCT dockworkers. Although the 2016 privatisation did not resolve the labour segmentation between the PCT piers and the rest of the port, cooperation between the different unions on both sides has strengthened, resulting in the successful conclusion of a collective bargaining agreement for PCT workers in 2022.
Piraeus, under COSCO’s management, has become the fourth largest container port in Europe (according to 2023 data), but this success has come with significant environmental costs. Local communities are directly affected by the environmental issues stemming from COSCO’s operations due to the port’s proximity to the densely populated City of Piraeus. Local citizens dealt with air pollution generated by the port long before COSCO’s arrival, but now face unprecedented levels of pollution from the increased traffic of both cargo and passenger vessels, which exacerbate public health issues. Notably, the planned expansion of the cruise terminal, which is expected to bring in an additional one million passengers annually, has been particularly controversial, with critics pointing to the harmful emissions from large cruise ships operating non-stop, and increased traffic congestion caused by tourist buses shuttling passengers between the port and Athens’ historical sites. In addition, land reclamation to expand the terminal is using toxic dredging material from other areas of the port, posing a direct threat to the marine environment of the Saronic Gulf. These developments have sparked widespread mobilisation and resistance in the local community, which has, for now, successfully halted the port’s expansion through legal action, in what has emerged as the most controversial issue between COSCO and the citizens of Piraeus.
A less expected point of contention with COSCO is that, since gaining full control of the PPA, the company has signalled its intention to expand profit streams in different sectors of economic activity—at the expense of local businesses. This has led to tensions as COSCO’s broader commercial plans in logistics, ship repair, real estate, and even tourism and retail have been perceived as harmful to local business interests. These businesses have accused COSCO of monopolistic tendencies, arguing that its plans for the creation of a shipyard, a mall, hotel, and other leisure facilities are crowding out local competition and limiting opportunities for smaller businesses in the port’s ecosystem. Shipping and ship repair businesses have protested over price management and rising docking costs. Despite these concerns, the business community remains generally supportive of COSCO’s presence at the port, though it has become more watchful and cautious of its monopolistic aspirations. Last, COSCO’s operations in Piraeus have exposed longstanding governance issues and regulatory gaps in both Greece and the European Union. The Greek Government and local authorities have been criticised for lax implementation of environmental regulations, particularly regarding permitting the disposal of highly toxic dredging waste in the Saronic Gulf and allowing the construction of the new cruise terminal without an approved strategic environmental impact assessment. Additionally, there is a paradox in the European Investment Bank and the European Commission subsidising the expansion of the cruise terminal—a project widely criticised for its potential environmental harm, particularly its impact on air quality, traffic, and local infrastructure. In July 2024, and following many years of local mobilisation and litigation against COSCO, the European Commission attached stricter environmental guidelines to its continuing subsidies for the construction of the cruise terminal.
In-Depth Sources
Huliaras, Asteris, and Sotiris Petropoulos. 2014. ‘Shipowners, Ports and Diplomats: The Political Economy of Greece’s Relations with China.’ Asia Europe Journal 12(3): 215–30.
Neilson, Brett. 2019. ‘Precarious in Piraeus: On the Making of Labour Insecurity in a Port Concession.’ Globalizations 16(4): 559–74.
Souliotis, Nikos, Gerasimos Karoulas, Margarita Komninou, and Alexandros Afouxenidis. 2023. Προσελκύοντας τους ισχυρούς. Δρώντες, θεσμοί και πολιτικές των ξένων επενδύσεων στην Ελλάδα [Attracting the Powerful: Actors, Institutions, and Policies of Foreign Investments in Greece]. Athens: National Centre for Social Research. Link.
Tsimonis, Konstantinos. 2023. ‘Piraeus versus COSCO: A Conversation with Anthi Giannoulou and Anastasia Frantzeskaki.’ Global China Pulse 1(2): 95–103. Link.