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Our View: Port decision a bad advertisement for doing business in Cyprus

Larnaca port

IMPORTANT decisions that affect the whole country are better not left to local authorities, because the government has a certain obligation to respect them. For example, Monday’s decision by the Larnaca municipal council not to grant the request for an extension of the use of Larnaca port by a firm offering support services to two oil companies – Total and ENI – involved in hydrocarbon explorations off Cyprus, does not serve the country’s interest.

It most probably does not serve the town’s interest either, as the council’s voting, which was won by a single vote, indicated – thirteen councillors voted against the extension, 12 in favour and one abstained. It is not difficult for a couple of powerful, local businessmen to influence the voting of councillors in a way that would serve their private interests at the expense of the rest of the country. And we should not underestimate the force of populism which is greater in small voting populations.

Monday night’s decision went against everything the government has been trying achieve – attracting foreign businesses, turning the island into a centre for oil and gas services and stimulating growth. This was not a decision to promote the image of Cyprus as a business-friendly country. Medserv, which provided the support services to the oil companies, would now have to look for another location for its operations at considerable additional cost, at a time when the industry is going through a major slump.

Yesterday Laranca port workers, fearing they would lose their jobs if the companies left, staged a protest and delivered a memo to the Larnaca mayor demanding that the extension request was granted. Union representatives were also on radio protesting about the municipal council’s decision. It is incredible that at a time of high unemployment a municipal council could take a decision that would result in job losses.

If Medserv eventually decided to move its operations to another country (Haifa in Israel is being mooted as a possibility), it would be the worst possible advertisement for Cyprus. What foreign business would be able to take government assurances seriously when a government decision could be overturned by the parochially-minded councillors of a local authority that has a completely different agenda? And who would believe our marketing as a business-friendly country that offered good investment prospects?

Limassol mayor, Andreas Christou, in a commendable move, invited the oil companies to move their operations to Limassol port which had ample room for them. But a move to another location would involve significant extra cost and inconvenience for the companies. This is not a solution. The only solution is for the government to overrule the decision of the Larnaca council because this would incur a small political cost – it would be accused of not respecting the decision of the council – that would be nothing compared to the damage that would be done to the image of the country as a business-friendly centre.

The interests of a provincial municipal council cannot be allowed to harm the interest of the country.

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