Cyprus Mail

Cabinet gives green light to ports privatisation framework

By Angelos Anastasiou

THE Council of Ministers approved amendments to the legal framework governing the operation of the Cyprus Ports Authority, Transport minister Marios Demetriades said yesterday.

Speaking to reporters after the cabinet meeting, Demetriades said the changes were a prerequisite before inviting tenders for the privatisation of the ports.

“The amendments have been approved by the cabinet and will be forwarded to parliament, and I hope committee-level discussion starts next week,” he said.

“Our goal remains the invitation of tenders for commercial operations within May,” he added.

Asked to describe the changes effected, Demetriades said they were suggested by the government’s advisors.

“They are certain amendments facilitating the smoother operation of the ports,” he said.

“They will allow the government to cede the operations, since any revenues from such ceding will belong to the state. There are also some changes relating to the way tariffs are set.”

Demetriades pointed out that, according to privatisation legislation, the final deal will need to be ratified by parliament.

A ports authority source told the Cyprus Mail that the changes will likely relate to making the ports’ commercial operations financially viable.

According to the source, service tariffs at Cypriot ports have been too low, while tariffs on cargo were commensurately high to ensure a profit.

“The cargo fees will gradually be phased out and replaced by more fiscally sensible service fees,” he said.

“This will make our ports more competitive, and bring them in line with international practice.”

On Tuesday, Demetriades said that the management of the port’s commercial activities will be granted to a private company for a period between 25 and 30 years.

Asked if the privatisation of the port would boost government revenue, Demetriades said the issue does not only concern government revenue but primarily economic activity.

“We believe that through this process, our ports will operate more effectively and will increase economic activity in Cyprus,” he said.

A privatisations progamme, part of the €10bn economic adjustment programme, includes the privatisation of Limassol port, the Cyprus Telecommunications
Authority and the Electricity Authority of Cyprus, aiming to garner €1bn by 2016.

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