MSC’s Investment in Hamburg Port Nears Final Vote in Parliament

Hamburg's Parliament needs to approve MSC's investment in the port (CC0 1.0)

PUBLISHED JUN 21, 2024 4:58 PM BY THE MARITIME EXECUTIVE

 

The controversial plan for MSC Mediterranean Shipping Company to acquire approximately half of the Hamburg port operator Hamburger Hafen und Logistik AG (HHLA) cleared another hurdle although it still faces significant challenges before gaining government approval. While proponents hope to approve the deal before July 10 and the final session of Parliament before the summer recess, a right-wing political faction still looks to stall the approval.

Under the plan put forward in September 2023, MSC would acquire 49 percent of HHLA and form a new working relationship with the City of Hamburg for the strategy and management of the port company. Advocates cite the strong commitment from MSC to grow its volume in the port while citing that Hamburg faces stiff competition and has been losing market share in containers. The City would reduce its ownership position from approximately 70 percent to 51 percent. MSC has already acquired more than 20 percent of the shares through market purchases and a tender offer.

Critics had hoped to derail the approval process last week by pushing for a public hearing on the matter. The Budget Committee of Parliament held the hearing on Thursday with the presentations lasting for nearly six and a half hours. There were 35 speakers, mostly dockworkers, trade unionists, and from activist and environmental groups. Media reports are that none of the speakers were in favor of the transaction citing concerns over jobs, oversight of the operation, and security. There were also dockworkers protesting outside the building.

In a surprise move, the Budget Committee voted along party lines and approved the transaction at the end of the hearing. Opponents had hoped the requirement for the public meeting would delay the vote. Previously, the economic committee and the public enterprise committee also approved the sale of the HHLA.

The final approval now goes to the full Hamburg Parliament. As a city-state, Hamburg has a Parliament with more than 120 representatives elected by the citizens as well as the Senate. The Senate is in favor of the deal but the AfD political faction has thrown up a last-minute roadblock to the approval calling for a public referendum. Spokespeople for the right-wing political group contend something this significant requires the voice of the people. A two-thirds majority of the Parliament is required to call for a citizen’s referendum and if approved it can not take place for at least four months.

It is expected the deal will be presented to the Parliament ahead of the July 10 recess as the final approval step for MSC to proceed with the investment. Parliament will have to decide first if it should proceed to a public referendum. They have till July 10 to make their decision, or otherwise, the city Parliament will go into recess until September 4.