Cosco Greek Unit Says HP, Huawei Deal to Spur Athens Port

Cosco Pacific Ltd.’s (1199) Greek unit plans to offer cargo-train shipping to Hewlett-Packard Co. (HPQ) and Huawei Technologies Co. as of next year, boosting Piraeus port’s chances of becoming a bigger trade gateway.

Piraeus Container Terminal SA is counting on five multinationals, including California-based HP and China’s Huawei, to initiate rail-freight services from Greece’s biggest port to nearby countries, said Tassos Vamvakidis, PCT’s commercial manager.

“This is what we target,” Vamvakidis said in an interview yesterday at PCT’s headquarters in Piraeus. “To be the southern European entry point serving countries in the Balkans and on the Black Sea.”

PCT’s expansion plans may help Greece emerge from a six-yearlong recession and two international rescues totaling 240 billion euros ($324 billion) by stimulating demand for sea and rail transport near the crossroads of three continents.

Greece’s economy has shrunk about a quarter since the debt crisis began in 2009 and unemployment is about 27 percent, leaving Prime Minister Antonis Samaras’s New Democracy party neck-to-neck in polls with the main opposition group that opposes the austerity conditions tied to emergency aid. As head of a coalition with a four-seat majority in parliament, Samaras has fought off speculation Greece will need to call early elections and asserted the country is on the verge of a turnaround.

Rail Link

Samaras has showcased HP’s agreement in March to use PCT to move goods manufactured in Asia into Europe, saying it’ll have “multiple positive effects” for the port of Piraeus and the national economy. This became possible after the government rushed to complete a long-delayed 17-kilometer (10.6-mile) link from the port to the national rail network after China-based Cosco Pacific entered the Greek market.

In addition to the deal with HP, PCT is working on similar agreements with four other multinational companies including telephone-network equipment producer Huawei, according to Vamvakidis. He declined to name the other three companies, while signaling that at least one of them is also Chinese.

The planned rail services for HP will begin in the first quarter of 2014 and be the model for arrangements with the other multinationals, Vamvakidis said.

Block Trains

PCT plans to transport as many as 76 containers of HP goods a week by rail, he said. The service will be offered on so-called block trains, which load freight at one point and carry it to a final destination without splitting up or storing goods during the journey. At a later stage, PCT plans to offer space on block trains for shipping-line clients and manufacturers, he said.

“Our aim is to help our carriers and clients to expand in Piraeus’s hinterland,” Vamvakidis said. “Hewlett-Packard is the flag project.”

PCT has operated Pier II at Piraeus port since 2009 under a concession agreement with Piraeus Port Authority (PPA) SA and is building a third pier. PCT will operate the almost-completed eastern side of Pier III while PPA will be responsible for the western side. Full construction is due to be done by 2017 at a total cost of around 645 million euros, including an upgrade of Pier II.

Construction of Pier III’s western side will involve 200 to 250 jobs, according to Vamvakidis. The western side will generate 700 full-time jobs in addition to about 1,000 existing positions on the eastern side and on Pier II, he said.

To contact the reporters on this story: Jonathan Stearns in Athens at jstearns2@bloomberg.net; Paul Tugwell in Athens at ptugwell1@bloomberg.net

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net; Jerrold Colten at jcolten@bloomberg.net.

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