UPDATE 1-Hutchison makes highest bid in Greek port tender

(adds details throughout)

By George Hatzidakis

ATHENS, July 22 (Reuters) - A group including Hutchison Port (0013.HK) and Greek pharmaceuticals group Alapis (ALAr.AT) made the highest bid to run and upgrade cargo facilities at Greece's Thessaloniki port (OLTH) (OLTr.AT), the government said on Tuesday.

Greece launched a tender earlier this year to sell and modernise outdated port facilities at the northern city of Thessaloniki and Piraeus Port (OLPr.AT), which serves the capital Athens.

Greece's conservative government hopes to turn the ports -- two of the largest in the Mediterranean -- into regional hubs and boost cargo business.

"Within the next few days, we will start the procedure to appoint the preferred bidder, within the timeframe we have already set," Greek Merchant Marine Minister George Voulgarakis said in a statement.

Hutchison Port Holdings (HPH), which has operating rights in 45 ports around the world and is the port operating arm of Hong Kong conglomerate Hutchison, offered 3.1 billion euros ($4.94 billion) over the 30-year duration of the project, the statement said.

HPH is guaranteeing 70 percent of the offer price -- equivalent to 2.175 billion euros -- even if revenues from the port fall short of its expectations.

The company also pledged to invest a total of 489 million euros in upgrading the ports facilities.

Cosco Pacific (1199.HK), the world's fifth container port operator and the winner of the tender to run Piraeus Port, offered 881 million euros with a 70 percent guarantee and said it would invest 331.5 million euros in upgrades.

A joint venture led by Dubai Ports, the world's fourth-largest port operator and an affiliate of state-owned investment group Dubai World, offered 430 million euros for the project with a 70 percent guarantee and 468 million euros for upgrades.

OLTH's shares were down 6.9 percent at 32.40 euros at the close of trade in Athens. (Editing by Paul Bolding)