Financial Times

The small container terminal at Piraeus port operates close to full capacity, with ships queuing offshore for a berth and aging gantry cranes working around the clock.

While Greek imports soar and transit trade with the new European Union member states of Bulgaria and Romania shows a steady increase, the terminal's 450m euro ($583m) expansion plan lags several years behind schedule.

The arrival of a Chinese investor, however, could accelerate the transformation of both Piraeus and the under-used northern Greek port of Thessaloniki.

Cosco, China's state-owned container shipping line, wants to make Greece its hub for trade with the east Mediterranean, the Balkans and the Black Sea countries, according to George Alogoskoufis, Greek finance minister. Goods transported from Asia on large container ships would be offloaded at Greek ports to smaller vessels plying coastal routes in north Africa and the Black Sea.

"We have an unprecedented opportunity," Mr Alogoskoufis said in a Financial Times interview. "China wants direct access to ports in the region, while our facilities have plenty of room for expansion."

Cosco has already discussed with Greek officials several co-operation proposals. These range from taking an equity stake in Piraeus Port Authority (OLP), the state-controlled port operator, to managing several Greek ports under a long-term contract or allowing Cosco exclusive ownership of a new container terminal.

However, the government balked at transferring control of Greece's biggest port to a state-owned foreign company. It plans to seek a strategic partner to build and operate new container terminals at Piraeus and Thessaloniki, under a 15 to 20-year concession.

Mr Alogoskoufis said both port operators would launch international tenders in the first half of this year, with the aim of completing a deal by December. "It won't be an exclusive arrangement - other container companies would be able to use the facilities," he said.

Container capacity at both ports would be tripled, to 4.5m TEUs (20ft equivalent units) yearly at Piraeus and 3.5m at Thessaloniki, for a total investment, toether with new equipment and machinery, of about 750m euros.

While Cosco is seen as the front runner, China Shipping, another state-owned container line, Hutchison Ports, the Hong Kong-based operator, and DP World, which is owned by the Gulf state of Dubai, are also prospective bidders.

Greece's shipping sector has close ties with both Cosco and China Shipping through charters of Greek-owned vessels, mainly tankers and bulk carriers that transport more than 80 percent of Chian's imports of fuel and raw materials, but also container ships.

"These relationships go back a long way, but they've grown much stronger as China's economy took off," said Costas Constantacopoulos, managing director of Costamare, a Greek shipping company that has a dozen large container ships on charter with Cosco.