China throws a lifeline to Italy's Taranto

2009-08-13Asia Times

TARANTO, Italy - At the entrance to this city, hanging from an old house is an aging neon sign for San Marzano, an "Oriental Elixir" - a reminder of the historical destiny of Taranto. Newspapers explain that the company producing San Marzano, the city's liqueur, is going bankrupt, as seems to be the urban center. With little more than 200,000 inhabitants, there are 7,500 unemployed just from the local steelworks.

Roads in the city center are full of empty parking spaces and almost all the stores, out of season or not, show "sale" signs - concrete proof of the crisis. Taranto seems to be an example of the problems, frustrations and vain hopes of southern Italy. Once the gates of the East to Europe, the region is now almost a festering appendix of a fading continent (see Fading Europe aids China-US ties ( Asia Times Online, August 6).

In 1866, the then just-united Italy wanted Taranto as its main military port. Ministers from Turin had French leader Napoleon Bonaparte in mind, who envisaged Taranto as the potential main port of Europe because of its position almost opposite Egypt and the Suez. It was to be an alternative to Malta - hooked to the mainland and the strategic hub to control the Mediterranean.

However, as Napoleon's attempt to control Egypt failed because of Lord Nelson's warships, so did the dream of rebuilding Taranto's glory.

Taranto re-emerged in the 1960s with new steelworks that produced much of the steel for the Italian miracle, but sank once again when that miracle faded.

The city seemed destined to sink into a quagmire of organized crime, and in the grip of political hooligans, such as former mayor Giancarlo Cito who ended his career buried under a flood of arrest warrants for violent crimes.

Nevertheless, just when China began to grow and challenge some of the small- and medium-sized Italian enterprises of the north, Taranto was offered a new glimmer of hope.

At the end of the 1990s, the strategic potential of the port sparked the interest of one of the world's largest logistic companies, Taiwan's Evergreen, which bought a 40% stake in the port's container concession. Then, in January this year, 50% of the concession was purchased by Hutchison Whampoa, an even larger logistics company than Evergreen that is controlled by Hong Kong's Li Ka-shing, one of the wealthiest people in the world with close ties to Beijing.

The container port is therefore 90% Chinese-controlled, with the remaining 10% in the hands of an Italian associate, the Sisam company.

The investment in the port could transform the city - and Italy. At the end of this year, despite the global economic crisis, Taranto will be in a position to handle 800,000 containers a year, which could grow to 6-7 million or more if planned infrastructure development goes according to plan. This would make Taranto the largest container harbor in the Mediterranean and Europe.

However, there are the usual Italian snags.

"We asked for authorizations, already promised by the government, so we could proceed with the infrastructure work to expand the port," said Ippazio Stefano, whose name reflects the city's Greek legacy.

Some of the work to be done includes dredging the seabed by a couple of meters to allow the new generation of super-big containers to berth, and to build several kilometers of roads and railroads to connect the harbor to the main highway and the railway station.

These are projects that would take only a few months in workaholic China, but little progress has been at Taranto. The development is caught in red tape, with the authorities still wondering how to handle the mud dragged from the sea.

The project has the potential to transform Taranto, and even Italy. At present, the port serves only as a trans-shipment center, moving containers from large to small ships. Its true transformation would involve transporting the goods in the containers. That is, to open them, repackage them and put them on trains and trucks to be sent directly to their final destination.

If this were to happen, southern Italy would once again become a gateway to the Orient, and Italy would have a new geopolitical destiny. This would force Europe to rethink its policies and strategies toward China and Asia.

The Chinese partners have agreed to pay the 500 million euros (US$705 million) necessary to develop the port - all they asked for was a clear timetable and permits for the infrastructure work.

They are still waiting.

The project now needs a huge push from Rome, but this might depend on a dark political alchemy, almost as mysterious as the formula for Taranto's San Marzano. (2009-08-13 Asia Times)


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