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Cyprus

MPs renew call for review of state’s compensation deal with Hermes

File photo: Tymbou (Ercan) airport in the north.

Lawmakers on Thursday again called for a review of a deal whereby the state compensates Hermes – the operator of the two international airports in the south – for revenues lost to Tymbou (Ercan) airport in the north.

During a closed-doors session of the House watchdog committee, MPs heard that year in year out the state compensates Hermes anywhere from €5m to €8m.

Socialists Edek said the agreement signed by the state was slanted in favour of Hermes, and that it needed to be revised.

Taxpayers end up footing the bill due to the operation of Tymbou airport, over which the authorities of the Republic have no control, the party said.

And this compensation continues to be paid to Hermes at a time when the two airports it is running – Larnaca and Paphos – are registering record passenger traffic.

In 2002, when the state issued the conditions of the tender for a strategic investor to take over the two airports, it had pledged that it would not create a third airport.

But the opening of the crossing points linking the island’s divided communities in 2003 changed the state of play. The condition for compensating Hermes was inserted in the agreement, which was signed in 2006.

The overall deal provides that Hermes would build and manage the airports for 25 years, or until 2031 when they will return to the state.

The state receives 33 per cent of the company’s revenues each year.

The compensation to Hermes against lost revenues from the operation of Tymbou in the north is calculated by a complex formula, which takes into account that airport’s passenger traffic as well as that of Larnaca and Paphos. Data for Tymbou is provided by the secret service.

The agreement also includes certain forecasts and when the actual traffic in the two airports in the south exceeds them, then the state would stop compensating Hermes.

The compensation issue has been discussed several times in parliament, but to no avail.

MPs have demanded that measures be taken against those Greek Cypriots who use the airport in the north.

But in 2004 when the state tried to punish someone for using Tymbou, it had lost the case in court both in the district courts and the Supreme Court.


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