New row brewing over higher tariffs at Limassol port

By Sarah Ktisti
New turmoil and serious problems are afoot at Limassol port due to the tariff increases that the port’s managing companies have decided to impose, with exports and transit trade expected to be worst affected and consumers set to take the full hit as an end result.

The contract signed with the privatisation of the port allows these companies to review the tariffs they impose with a specific formula.

Already a tricky time for Cypriot export companies, these increases will make it even more difficult to export from Cyprus. Meanwhile, things will be even worse for transit trade, which brings very large revenues to Cyprus. The new increases will be an obstacle for various companies using the port of Limassol as a stopover in the area.

A similar problem arose last year at exactly the same time, but it was finally solved with the intervention of the state, when a compromise solution was found.

Meanwhile, these increases are expected in one way or another to end up hitting consumers the hardest, since it is impossible for traders to absorb them.

According to reports by state broadcaster Cybc and Politis newspaper, the agreement made for the privatisation of the port gives the management companies the opportunity every December to adjust the charges where they impose.

The calculation is made through a formula which, according to those affected, is not complete, since it does not take into account all the necessary indicators, leaving out the important indicator concerning exports.

Essentially, in this way, and due to imported inflation, charges are added that are not directly related to the Cypriot economy.

For 2022 already two of the three companies involved announced very large increases, with DP World increasing its charges by 29.2 per cent from January 1, 2023, and P&O, which is responsible for berthing and departure services, by 12.5 per cent.

A similar tactic is expected to be followed by Eurogate, from which announcements are expected in the near future.

Last year an increase of 15 per cent was recorded while in 2020 there was a 7.5 per cent hike.

There has been strong reaction from the Association of Cyprus Maritime Agents, while the Cyprus Chamber of Commerce (Keve) is also deeply dissatisfied with the announced increases.

Keve has already taken the initiative to hold a meeting with the stakeholders, requesting the immediate intervention and assistance of the Transport Ministry.

On another level, once again the issue of the contract between the state and companies enters the discussion, but the scope for revising it is not great, since it also needs the agreement of the other side, as well as EU.

One of the main challenges to finding a solution is the fact that time has run out, since in just 15 days from now the new charges will be in operation. At the same time, parliament is currently closed for consultations to pressure discussions at the political level.

Meanwhile, opposition Akel on Friday was the first political party to criticise the government’s decision to privatise the port, stating the tariffs have caused a negative chain of effects on the island’s economy and society.

“Where are the supporters of privatisation to pay the bill of their politicians? Where are those who “understand economics” to see the results of their policies in the local economy?” said Akel press representative, Giorgos Koukoumas.

“The Disy government is leaving a heavy legacy with the privatisation of the country’s only commercial port, with an agreement scandalously damaging for the country. From the Port of Limassol to the Coop, Disy ruled for ten years serving big private interests and sacrificing the public interest, the interest of the many,” Koukoumas concluded.