Greece stops privatization of important port

But now things are different: The Greek newspaper “Ta Nea” was the first to report the cancellation on Monday. A few hours after publication, Prime Minister Kyriakos Mitsotakis confirmed the change of heart in a TV interview. His reasoning: “Under the current conditions, the port of Alexandroupoli is of such great strategic, geopolitical and energy importance that it must remain under the control of the state.”

The port is an important hub for military transport

Alexandroupoli has been the main hub for US and NATO military transport to the Black Sea region since the beginning of the Russian invasion of Ukraine. Since Turkey blocked the Bosphorus for foreign warships, there is no longer a sea route for these transports. Road and rail connections lead from Alexandroupoli to the NATO states of Bulgaria and Romania.

Since the beginning of the war, the US has brought hundreds of main battle tanks, artillery pieces and helicopters to NATO’s eastern flank via Alexandroupoli. Many deliveries of weapons from the West to Ukraine also pass through the port. Warships like the amphibious transport USS Arlington and vehicle transporters like the Liberty Passion are now regular visitors to the once sleepy port of Alexandroupoli.

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A defense agreement signed between the governments in Athens and Washington in May provides for the Americans to expand Alexandroupoli into a permanent naval base. For this purpose, the quays will be enlarged and the harbor basin will be dredged so that larger ships of the US Navy can also dock there.

Alexandroupoli is also an important hub of an ambitious infrastructure project, the planned “Sea2Sea” railway line. It will connect the northern Greek Mediterranean ports of Thessaloniki, Kavala and Alexandroupoli with the Bulgarian Black Sea ports of Burgas and Varna, as well as with Ruse on the Danube, Bulgaria’s fifth largest city.

Against the background of the war in Ukraine, this freight corridor, which has been planned and funded by the EU for more than a decade, takes on special significance as a “Bosporus bypass”. Greece is currently investing 1.6 billion euros in the modernization of the railway connection to Bulgaria.

Alexandroupoli will also be of great importance in terms of energy policy in the future: the Greek-Bulgarian consortium Gastrade SA intends to put a floating liquefied natural gas terminal (FSRU) into operation 18 kilometers south-west of the port at the end of next year. The EU is funding the project, which is estimated at 394 million euros, with 166.7 million.

Among those interested was a Russian oligarch

The plant will primarily serve to supply gas to the Balkan countries of Bulgaria and North Macedonia. A gas pipeline from Alexandroupoli to the Bulgarian city of Zagoria, the Interconnector Greece-Bulgaria (IGB), was put into regular operation at the beginning of October. According to the operator’s plans, the LNG terminal Alexandroupoli could also supply natural gas as far as Moldova and Ukraine.

Gastrade already has planning permission for a second LNG terminal in the neighborhood of Alexandroupoli. Both plants together would have a capacity of 11.6 billion cubic meters per year. For comparison: Greece’s annual consumption is currently around six billion cubic meters.

Against the background of the growing military and energy policy importance of the port, the privatization process attracted a great deal of international attention – including in Moscow. Initially there were four bidders in the running. One application in particular drew attention: The port company of Thessaloniki (ThPA) also wanted to take over Alexandroupoli.

At first glance, this sounded like synergies, but it was highly geopolitical. Because almost 72 percent of the shares in ThPA are held by Belterra Investments Ltd. The company belongs to the empire of Russian oligarch Ivan Savvidis.

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He was born in Georgia in 1959 as the son of Pontic Greeks. The billionaire, who became rich in the tobacco business, sat in the Duma from 2003 to 2011 as a member of Vladimir Putin’s United Russia party and is considered a confidant of the Kremlin chief. He started his activities in Greece in 2012 with the purchase of the football club Paok Thessaloniki. In 2013, Savvidis also received Greek citizenship. In 2017 he joined the port company of Thessaloniki. In addition to hotels and a tobacco factory, his Greek portfolio also includes the daily newspaper “Ethnos”, the business portal “Imerisia” and the television station “Open”.

After Russia’s invasion of Ukraine, Savvidis’ bid for Alexandroupoli was considered hopeless. He therefore withdrew from the bidding process. The only two remaining interested parties were Houston, Texas-based Quintana Infrastructure & Development and a Greek-American consortium led by US wealth manager Black Summit Financial Group.

Prime Minister Mitsotakis announced that the HDRF will now expand the port with its own funds. The fund, a kind of Greek trust, will continue to control 100 percent of the shares in the port company after the privatization process was cancelled. The HDRF was created in 2011 during the Greek sovereign debt crisis under pressure from international lenders. Most state assets such as ports, airports, holdings in utilities and infrastructure companies are bundled in it.

It also acts as the privatization authority. The sale of the Greek ports was one of the lenders’ specifications from the debt crisis era. In 2015, 51 percent of the port company of Piraeus went to the Chinese state-owned company Cosco. Cosco now controls 67 percent of the shares in the Piraeus Port Authority.

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