Cyprus Mail

Audit Office concerned about ‘low rent’ for Paralimni marina

Energy Minister Giorgos Lakkotrypis (left) with a representative of investor PMV Maritime Holdings after signing the contract last week


The rent of state land for the new Paralimni marina agreed between the government and the private company constructing the project has been set too low, the Audit Office has said.

A newspaper report on Wednesday said that in a letter sent earlier in the month by the Audit Office to the transport ministry, the service said it opposed the €8.2m rent agreement signed between the government and investor PMV Maritime Holdings Ltd for the lease of state land for 125 years.

The 125-year leasing period is a lot longer than the usual 50 years agreed in the cases of other marinas, the report in Phileleftheros said.

Energy Minister Giorgos Lakkotrypis, investor PMV Maritime Holdings and the Paralimni municipality signed the contracts for the building of the Paralimni marina last week. The contracts concern the long-term lease of land and sea space in the area of the Ayios Nicolaos fishing shelter of Protaras.

At a cost of €110m, the project that is expected to be fully operational in mid-2021, includes residential and commercial buildings and a hotel. The marina is expected to have the capacity for 300 vessels.

The Audit Office, Phileleftheros said, finds that the lease does not reflect the true value of the state land which is to be used for the project. It also points out that the contract lacks provisions allowing the state to benefit from the proceeds if profits exceed expectations.

Concerns were also raised over the lack of competition as only one bid for the project was submitted and the economic advantages to the state were not documented.

The Audit Office has also asked the transport ministry to review the clause which provides for a €1,000 daily penalty to the investor in the case of construction delays, which it finds low compared to the size and importance of the project.

It also said that the provision is vague as to when the fine may be imposed, merely stating that the fine will be necessary if “it is reasonably obvious that the progress of work is delayed or is likely to be delayed”.

The transport ministry, according to Phileleftheros, replied to the Audit Office that the daily fine is proportional to what was provided for the marinas of Ayia Napa and Limassol, which was set at €850 and € 3,000 per day respectively.

As to the leasing period, the ministry said that in other cases concerning marinas, the total maximum period is also 125 years once provisions for lease extensions are included. In the case of the Paralimni marina, it said, no lease extension provision over the 125 years was given.

The ministry explained that the state will not be entitled to eight per cent of investor sales as in other marinas because it considers that the commercial aspect of the development is limited compared to that of the Limassol and Ayia Napa marinas.

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