articles | 16 July 2019

Delays to Larnaca marina development

Two class-action suits have been filed with the administrative court aiming to stop in its tracks the government’s recent decision to award an Israeli consortium a contract for developing the Larnaca marina and port.

The action comes amid reports that the government and the Israeli consortium were about to close a deal following months of negotiations.

In late April 2019, the Transport Ministry had scrapped a tender for developing Larnaca’s marina and port as a single project, and announced it would be engaging in direct talks with the last remaining bidder.

The negotiations with that bidder – a consortium of Ampa Ltd & Israel Shipyards Ltd, companies of Israeli interests – would be held outside the tender process.

Now, two groups have filed separate class-action suits claiming the government decision to hold direct talks with the consortium is null and void and in breach of public procurement laws.

Media reports say one of the suits was filed by a group of companies (importers and exporters) who are users of the port in Larnaca and who are averse to the port becoming primarily a passenger terminal.

According to the Dialogos news website, one such company holds a lease on some 100,000 square metres of space at the port on especially favourable terms.

The other suit, it is understood, was filed by a group of shipping agents, linked to business interests at the port.

The same publication said the Cyprus Shipping Association had recently intimated to the government that it wanted to be included in the ongoing talks with the Israeli consortium.

In a letter sent to the transport ministry in early May, they were asking to be allowed to apply jointly with the Israeli consortium.

The latest legal actions are expected to further delay the planned development of the port and marina in Larnaca.

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 then fell on the recession and the 2013 banking crisis.

Source: Cyprus Mail

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