Finance Minister Harris Georgiades said that the government is working on a new proposal aiming at attracting private investors to state-telecom Cyta which is based on the philosophy of the commercialisation of the Limassol port.
The finance minister, who was commenting in an interview to state-radio CyBC said that the proposal which the ministry reviewed at a “technocratic level,” will attempt to soothe concerns expressed by opposition parties which earlier this year rejected a previous government proposal to set up Cyta Ltd, transfer all operations of the Cyprus Telecommunications Authority, before selling it to a private investor.
Limassol port“We are preparing something and we are taking into account concerns that were expressed in the parliament few months ago when the parliament was considering the initial proposal to the extent we can,” Georgiades. He added that the government will attempt “to convince the parliament” that the model applied in the commercialisation of the Limassol Port –which allowed the government to maintain ownership of the port’s assets while transferring responsibility of its operations to private investors—could also be applied in the case of Cyta, which is losing market share to competition, and transform this into a “driving force for the economy”.
“Where the state can contain itself to a supervisory and regulatory role and unleash these productive sectors from the constrains of state control and allow them to operate according to the terms of the free market, then in these cases public interest is served,” he said without revealing additional details.
Three consortiums, one led by Germany’s EuroGate and the two other led by DubaiPorts, will assume responsibility over the port’s operation early 2017, after they were declared winners of a competition earlier this year.
Three days after rating company Standards and Poor’s upgraded Cyprus’s sovereign credit rating a notch to BB which is still two grades below investment grade, the finance minister also said that the government will continue promote structural reforms.
“We were once twelve grades below investment grade and now we are only two grades below that,” he said in reference to the S&P decision, adding that the government will not relax its fiscal policy. “No economy can attract foreign investment or finance its needs if it does not enjoy investors’ trust. We would need two budgets to cover everything that is demanded in spending”.