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Cyprus

Have marina plans run aground?

Latest setback for Paphos marina one of many for Paphos and Larnaca

THE rejection this week of what had been the winning tender for Paphos marina has raised concerns over the viability of the government’s commitment to transform Cyprus into an upmarket boating destination for the eastern Mediterranean.

The failure of the Poseidon consortium’s €215 million bid, a full ten years after the bidding process was first launched, is mirrored by years of thwarted attempts to transform Larnaca port and marina further along the coast.

The long delays in the construction of the two marinas have various interrelated and complex factors, say officials.

“It is complicated, it has to do with the court, the government, the economic crisis and other factors,” Larnaca mayor Andreas Vyras told the Sunday Mail.

“These are huge projects which need very detailed planning,” said Dimitris Constantinou, spokesman for the communications and works ministry which is responsible for the development of Larnaca port and marina. “The funding has to be carefully considered and all the necessary arrangements have to be finalised so nothing will go wrong.”

“It is a complex thing to find a solution that is the best for local residents as well as offering a return on investment for the investors,” said Natasa Pilides, director general of the Cyprus Investment Promotion Agency (Cipa).

But does it really need so many years to finalise a deal which should be so immensely profitable for investors, municipalities and the country?

Artist's impression of the Poseidon plan for Paphos marina. The tender was rejected last week
Artist’s impression of the Poseidon plan for Paphos marina. The tender was rejected last week

In the case of Larnaca, the plans for the expansion and privatisation of the marina have been plagued by years of delays and failure to find investors. The government struck a deal with Zenon Consortium back in 2010 for a €700 million project to transform both the existing port and marina. The consortium failed to raise the necessary funds even though the government extended the deadline up to 20 times until 2015 when the deal fell through.

Much of the blame fell on the recession and the 2013 banking crisis.

But according to the head of the Larnaca Chamber of Commerce, Othonas Theodoulou, the problems predate those events. In the beginning, the upgrading of Larnaca marina and the port were two separate projects. When it was decided to merge the two, the chamber objected, arguing that the port project would delay the marina. Theodoulou told the Sunday Mail that they have been proved right.

“If they were not merged, Larnaca would have a nice marina now,” he said.

Where Paphos is concerned, the tender was first announced as far back as 2007. Soon after, in 2008, the project was frozen by lengthy court cases after various developers bidding for the project sued each other. It was not until 2015 that the supreme court finally awarded the contract to Poseidon Consortium. Then began another lengthy process in which Poseidon had to provide proof of available funds, which the marina management committee decided on Wednesday it had failed to do.

The project has now been offered to Pafilia developers, the only other tender on the list, which has to prove it has adequate funding for its €175m plan for the marina. Poseidon, meanwhile, has announced it will appeal Wednesday’s decision at the supreme court.

Head of the Paphos Chamber of Commerce Andreas Demetriades believes that previous governments were to blame for allowing the court cases to delay such an important project.

“It was a mistake by the then ministries not to move on with the next tender but instead wait for the final decision of the court,” he said. “There was no need to wait for so many years; it was something where so many benefits could have occurred for so many people.”

He thinks it would have been far better to press ahead with the project and then pay damages to the company which had lost the bid if the courts ruled in their favour.

He is confident that this time with different people in charge such a delay will not be tolerated.

“We will ask the ministry to proceed with the next tender and if Poseidon is found to be eligible for damages that is no problem,” he added.

His statement suggests that Paphos marina will become a reality, though this has been claimed many times in the past.

Pafilia has already said they have the funds available. Though they still have to prove it, they are the biggest developer in Cyprus.

They are currently constructing their flagship development, ONE, a building of 37 floors on Limassol’s beach front which will be the tallest seafront tower in Europe when finished and are building major residences around Cyprus.

As for Larnaca, the mayor is confident that a contract will be signed by the end of the year. There are now five solid-looking investors very interested whose plans are currently being evaluated. Cipa’s Pilides said the project had now inspired the right level of interest and she was hopeful that a deal could be reached soon.

Artist's impression of the now defunct Zenon project for Larnaca marina
Artist’s impression of the now defunct Zenon project for Larnaca marina

A glimpse at what is at stake for Larnaca and Paphos can be seen in the completed marina in Limassol and the one under construction in Ayia Napa. The Limassol marina which opened in 2013 attracts thousands of visitors every day. It is not simply a specially designed harbour with moorings for pleasure yachts and boats but a destination for living, yachting, dining and shopping. The Limassol company running the harbour has sold most of their luxurious beachfront villas, has 41 commercial deployments, 27 shops and boutiques and 650 berths.

Work started on Ayia Napa marina last year and should be completed in five years. Like Limassol it will have both a residential and commercial use with 190 luxury one- to four-bedroom apartments in two twisting towers, 29 villas, a 600-berth full-service marina and boatyard as well as shops and waterfront restaurants.

Mayor Yiannis Karousos expects it to be as successful as the Limassol marina, with yachts travelling around the island and both local and international tourists visiting all year round.

It is a future that Paphos and Larnaca are eager to share.

Changing landscapes

Building the marinas would change the landscape of Larnaca and Paphos.

The Paphos marina, situated in the area of Potima between Kissonerga and Peyia will cover an area of 155,000 square metres, 42,000 of which will be residential and commercial developments. It will include up to 1,000 berths for boats and ships of various sizes. Pafilia’s project has a cost of €175 million. More details have not yet been made public. A spokeswoman of the company said on Thursday more information will be made available later on.

Plans for Larnaca’s marina and port include berths for up to 1,000 boats.

It specifies that the total area to be developed has 510,000 square metres which includes the Larnaca port and marina as well as an undeveloped surrounding area.

According to the terms of the process, the port area is split into two.

The northern part will be used exclusively for port operations, while the southern part will cover an area of 185,000 square metres. This part may be used for large cruise ships as the new plan includes berths for giga yachts and cruise ships.

General terms for the development allow for the construction of high rise buildings up to 15 floors. Investors will have the option to build residences, shopping areas, offices, restaurants, recreational or sports venues.

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