Plain sailing for little bit of Greece run by the Chinese

IT IS only two years since half the Aegean port of Piraeaus was taken over by China’s Cosco in a deal that put €500 million (£405m) into the empty ­coffers of Greece’s cash-strapped ­government.

In that time cargo volume has risen to three times its level under port captain Fu Cheng Qiu. The other half of the port is still run by Greece. And the fact its business lags behind Cosco’s is emblematic of the entrenched labour rules and relatively high wages – for those lucky enough to still have jobs – that have ­stifled Greece’s economy.

“Everyone here knows that you must be hard-working,” said Captain Fu, under whose watch the Chinese-run side of the port has lured new clients, high-volume traffic and bigger ships.

As the Greek government contemplates selling off state-owned assets to help pay down staggering debts, it might be tempted to lease or even selling the rest of the port to China. But if the Cosco example is representative, the trade-offs – mainly a sharp reduction in labour costs and working rights – might be ones many Greeks would be loath to accept. Captain Fu, for his part, says Greece has much to learn from companies like his.

“The Chinese want to make money with work,” he said. In his view, too many Europeans pursued a life of leisure. “They wanted a good life, more holidays and less work,” he said. “And they spent money before they had it. Now they have many debts.”

Besides the cash that put half of the port into Chinese hands, Athens is receiving more income from taxes as a result of its increase in trade. With only a handful of Chinese managers, Cosco’s operation is also providing around 1,000 jobs to Greek workers – compared with the 800 or so who work the dock that is still under Greek ­management. On Cosco’s part of the port, cargo traffic has more than doubled over the last year, to 1.05 million containers. And while profit margins are still razor thin, that is mainly because the Chinese firm is putting a lot of its money back into the port.

Cosco is spending more than €300m to modernise its dock to handle up to 3.7 million containers next year, which would make it one of the world’s ten largest ports. Workers are also laying the foundations for a ­second Cosco pier.

The Greek-run side of the port, which saw a series of strikes in the three years before Cosco arrived, has been forced by the Chinese competition to seek its own path to modernisation. Still, only about a third of its business consists of cargo handling; the rest is made up of more lucrative passenger traffic.

The salaries of some workers reached €140,000 a year with overtime; Cosco is typically paying less than €18,000. On the Greek side, union rules required that nine people work a gantry crane; Cosco uses a crew of four.

“It was just crazy,” recalled Mr Psaraftis, who was the chief executive of the port from 1996 to 2002. “I told them, ‘If you keep this up, this thing will be privatised.’ But they didn’t listen.”

On the other side of the chain-link fence that separates the Chinese and Greek operations, Captain Fu said he would love Cosco to run all of Piraeus if it were for sale. That would cement Chinese dominance of one of the most strategic shipping gateways to southern Europe and the Balkans. Such a move, though, might meet stiff opposition from unions and officials at the Piraeus Port Authority, who criticise Cosco’s labour relations.