German Government Permits COSCO’s Investment in Hamburg Terminal
After 18 months and a strong political debate over the level of Chinese influence in Germany and the West, the German federal government on Wednesday cleared the way for COSCO Shipping Ports Limited to invest in one of the three large container terminals in Hamburg operated by Hamburger Hafen und Logistik (HHLA). The company responded thanking the government and saying that the investment would permit the terminal to be expanded into a preferred handling location for the strong trade with China.
“The federal government confirmed to the parties to the purchase today in a letter that the revised purchase contracts are in line with the conditions of the partial prohibition,” they said in a statement. Calling the terminal critical infrastructure, the federal government said the cabinet decision for a partial ban limiting the investment to under 25 percent would be upheld.
HHLA had been pushing for a decision from the federal government after first announcing the investment agreement in September 2021. At the time, they said COSCO intended to purchase a 35 percent stake in the Tollerort terminal (CTT) to consolidate its operations in Hamburg.
Last month, HHLA said, “We believe we have answered all the questions.” They called on the federal government to finalize the terms initially set by the cabinet in October that reduced the investment percentage. Reports in the German media suggested that there however had been an ongoing debate to possibly lower the “partial ban” further limiting the percentage COSCO would be permitted to acquire.
The Foreign Ministry was believed to be leading the opposition to the investment. They sought to limit China’s influence on the German port and the broader European transport and trade infrastructure. Chancellor Olaf Scholz supported the deal and pushed through the compromise to win support from members of his collation government.
“All issues within the scope of the investment screening process were clarified jointly in intensive, constructive talks,” HHLA said in its statement today. HHLA and COSCO anticipate that they will finalize the transaction soon with the Chinese company expected to take a 24.99 percent stake in CTT.
HHLA emphasized that China is currently Germany and the Port of Hamburg’s largest trading partner. They said around 30 percent of the goods handled in the Port of Hamburg come from or go to China.
Located off the Elbe, HHLA Container Terminal Tollerort occupies the smallest area of the container terminals in Hamburg but is considered to be a highly efficient operation. It has four berths able to receive the largest capacity containerships in the world. It can handle vessels 1,300 feet in length and with a beam of up to 184 feet. It accommodates ships with a draft up to nearly 50 feet.
HHLA has said the investment would ensure Hamburg’s position in global trade and provide for additional jobs. They cited the growing competition among ports and the need to strengthen the relationship with COSCO to retain and grow its volume in the port.
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