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Cyprus

State scraps Larnaca marina competition

The government has scrapped a competition regarding the development of Larnaca’s marina and port as a single project, but will be engaging in direct negotiations with the last remaining bidder.

In a statement on Tuesday, the transport ministry said it was cancelling the tender for “legal reasons.” It did not elaborate.

However, it will pursue talks – outside the tender process – with the sole remaining contestant with a view to awarding a concession contract.

The last remaining bidder in the competition was a consortium of Ampa Ltd & Israel Shipyards Ltd, both companies of Israeli interests. The two other contestants had withdrawn long ago.

Asked to comment, Larnaca mayor Andreas Vyras said they would examine the government decision “with a clear head.”

If something positive can be taken away from the decision, he added, it’s that the government will continue talking to the Israeli consortium.

“We hope that the new process will yield results soon. Larnaca expects the state as well as the investor to take all actions necessary and to resolve all outstanding issues, allowing this vital project to be carried out.”

Vyras said that in a telephone conversation he had with transport minister Vasiliki Anastasiadou, she told him that the direct negotiations with the Israeli investors would be open-ended, time-wise.

The tender for developing Larnaca’s marina and port had been extended dozens of times.

Last September, Larnaca’s mayor was warning that the Israeli suitors were having reservations about a clause that placed a cap on the volume of cargo to be processed at Larnaca port.

A ceiling of 900,000 tonnes per annum had been placed. The clause was inserted in the agreement for the development of the new Limassol port and terminal, inaugurated in May of 2018.

It’s understood this term had been intended as an enticement to the Limassol port investors, constraining competition from other ports on the island.

Initially three suitors had expressed an interest in the Larnaca project.

These were: Peninsular and Oriental Steam Navigation Company and Cabo Marina S. de R.L. de CV, a joint venture between the Dubai Port Company and the American IGY Marina; China Communications Construction Company Limited, a Chinese state-owned company; and Ampa Ltd & Israel Shipyards Ltd.

Reportedly, the Israelis were offering to invest around €1.2bn.

The mooted project in Larnaca envisions a 1,000 berth marina and port involving a development of up to 510,000 square metres.

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

Plans for expanding and privatising the Larnaca marina have been plagued by years of delays and failure to find investors.

Back in 2010 the government had struck a deal with Zenon Consortium for a €700m 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.

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