By Bejay Browne
A STUMBLING block involving financial stipulations in the contract for the winning marina tender bid in Paphos will be overcome, officials assure, as the decade-old project hit multiple snags as it struggles to get off the ground.
A dispute in the contract for the long-awaited facility, has meant that the ‘Poseidon Grand Marina’ has to submit an initial contract deposit by November 10 to the administration committee which manages marinas.
According to the head of the Paphos Chamber of Commerce, (EVE) Andreas Demetriades, the joint- venture behind the project, in which Aristo developers is a major shareholder, were under the impression the deadline could be extended, giving them sufficient time to put all the necessary financial measures in place.
However, this is not the case, he told the Sunday Mail.
“The joint venture thought that the tender authority had the legal capacity to extend the validity of the period for proof of funds, but the attorney-general specified that it has no legal capacity. This is the last stumbling block.”
Demetriades said he believes the joint venture company will overcome this hurdle, and already a consortium of three Cyprus banks are prepared to back the venture financially.
He said that the relevant banks are the Bank of Cyprus – which is the leading bank – Hellenic and Eurobank. They will submit proof of funds, in accordance with a letter sent by the administration committee which manages marinas, he added.
“The tender was awarded to the joint venture and they then have to satisfy the specific terms- with proof of funds and other information deposited by November 10.”
Once the joint venture meets all of the necessary requirements, the information will be examined and then they can proceed to the signature of the contract: “I believe this has to be signed before the end of the year,” said Demetriades
Then, according to the terms of the tender, the joint venture has a period of three years to complete the project and start operation. However, the plans suggest that this will be possible in two years, he said.
“They will instruct their contractors that it should be in this lesser time frame. We’re looking at completion in 2019.”
Paphos has long campaigned for a marina as it promises to attract high spenders and quality tourism.
Following the announcement of the tender for the project in 2007, it was awarded to the Cybarco-Pandora consortium of which the Leptos Group was part of, in 2008. However, the other two consortiums who had bid for the project challenged the award, at various stages.
The project had been frozen since litigation began after it was awarded in 2008.
“We should stick to the November deadline and the banks are doing their best,” said Demetriades.
Demetriades noted that the total cost of the construction of the project is around 215 million euros and according to the terms of the tender, proof of funds must total 60 per cent of that amount.
“This is around 125 million euros. The joint venture has cash of 25 million euros and the banks will provide security for the other 100 million.”
He added that the terms in the tender documents do not stipulate that this has to be cash- it can be a bank commitment, or backing from large, sound financial investors, he said.
“This should be sufficient enough. Nobody can say 100 per cent that that will be that, but I am 99.9 per cent sure this will proceed.”
This latest upset is the last in a long line of delays and disputes which have hit the project which has been planned for the last ten years, said Kissonerga community leader, George Stylianou, adding that it mustn’t be held up any longer.
The proposed marina at Potima in Kissonerga will be a crucial project for Paphos and a landmark development for the coastal town, said Stylianou. When finally built, the marina will have a capacity of 1,000 berths.
“It’s inexcusable that there should be a further delay because a ten-year delay is long enough. They should sit down and find ways to overcome any problems. It was a misunderstanding, as the 60 per cent was thought to pertain to the marina works only and not the entire project, but that is not the case, so more funds are involved.”
He added that if a two-month extension was needed, in his opinion, it should have been granted. “This project is very important and will make Kissonerga the ‘Beverly Hills’ of Cyprus.
He explained that as well as the marina, there will be ten wave breakers constructed in the sea which will help to maintain 1.5km of sandy beach.
“This will be one of the better-quality areas of Paphos and one of the most expensive. The letters from the banks should be accepted rather than the actual loans. A commitment letter should be adequate,” he stressed.
Back in May, Aristo Developers announced that the long-awaited marina project would soon get underway, following a ruling by the Supreme Court in favour of applicant ‘Poseidon Grand Marina’,
A source at Aristo developers said that the recent turmoil wouldn’t deter them from their goals. “As concerns this issue, we are now anticipating to proceed further. We will have everything in order for November 10 to show that we have the required capital in place for the marina. It’s a logical conclusion that we will reach our aim,” he said.
Once the contract is signed, explained Demetriades, then the joint venture will have to submit full designs to be approved – this will take several months – and then the construction can proceed.
Initial plans which were ‘general’ were submitted with the tender application and now the joint- venture must supply all sorts of in- depth information and mechanical and electrical designs in support of the initial plan.
“They are working on these now and I believe construction will get underway in the middle of 2017.”
The EVE head said the chamber of commerce considers the marina as a major infrastructure work which will improve and enrich the tourist product of Cyprus, and in particular, Paphos. It will increase marine tourism and create a large number of smaller companies which will provide services and goods to the marina, especially to the owners of yachts, he said.
“They will need to buy food, groceries, fuel and have other requirements, such as tourist services and restaurants, also the entire area will become a ‘hot spot’ economically and for investment. We have already experienced this in Limassol with the marina there, we all see all of the positive results. The marina in Limassol is also used by locals as well as visitors and this will happen in Paphos too.”