President Nikos Christodoulides sent a message on Saturday to companies responsible for implementing strategic projects in Cyprus, emphasising that those failing to meet their obligations will not be tolerated.

He said, “The state is not to be blackmailed and will not just stand by as an observer.”

When asked about the project for the port and marina of Larnaca and an announcement by the contractor blaming the government, the president expressed general concern about the assignment of large projects. He added that the government’s priority is not just to assign projects but to ensure that those undertaking them can successfully implement them.

“Within this framework, I want to say, for all major projects, firstly, that the state is not to be blackmailed and, secondly, that the obligations undertaken must be fulfilled. If companies are unable to meet their commitments, we will not simply observe while time passes,” he said.

He further commented on the need to review the allocation process for such strategic projects.

The latest conflict arose over the Operation and Maintenance (O&M) guarantee for the port, which had expired. Kition Ocean Holdings, the project’s managing company, was refusing to renew it. A meeting was held at the presidential palace on April 15, where it was apparently agreed that Kition would provide a guarantee of €4.2 million, significantly lower than the €10 million the government had demanded.

Officially, Kition claims the project as currently planned is not viable due to adverse conditions stemming from Covid-19, the Ukraine war, and the ongoing conflict in Gaza. They seek to revise certain aspects of the agreement.

Kition has proposed being allowed to start the more profitable aspects of the project – building villas and flats – before beginning work on the port and marina. The government has refused to discuss this, possibly due to lost faith in the joint venture. To date, Kition has only carried out minor infrastructure works, such as maintenance on the old pier (a listed building) and creating a parking space. No substantive work has begun on either the marina or the port.