articles | 03 April 2014

Development of Larnaca port supported by town's municipality

Larnaca municipality fully supports the government’s decision to give Zenon Consortium a 45 day extension to conclude a deal that will bankroll the Larnaca port and marina project, according to a recent statement.

Larnaca mayor Andreas Louroutziatis said that he was optimistic over the negotiations between Zenon and potential investors, adding that the development was crucial to securing Larnaca’s growth prospects.

The cabinet decided last Wednesday to give an additional extension to Zenon to conclude the deal, the fifth extension given thus far.

Zenon – consisting of the Paraskevaides Group, Iacovou Bros, Petrolina and Vouros – signed an agreement with the government in 2012 for the development of the Larnaca port and marina worth a reported €700m.

Local banks set to bankroll the project pulled back following the financial crisis of 2013 so the consortium began seeking financing elsewhere for the marina component of the project.

Under the MoU concluded with the government, Zenon was to commence construction works by late September.

The project was to begin with an initial enlargement of the marina to provide facilities to accommodate cruise passengers.

The master plan aimed to minimise the initial investment by keeping most of the existing facilities and to optimise the cruise operation by building an offshore jetty and a cruise terminal building. Under the Build, Operate & Transfer (BOT) method, development of the port includes the extension, modernisation and operation for 35 years of the existing port with two major components. The first is a cruise harbour with a new cruise terminal and an offshore mooring jetty and the second is a commercial port to accommodate local traffic.

The extension didn’t satisfy everyone involved. Dockworkers went on a two-hour strike recently, asking the government to step in and end the uncertainty regarding the project by either pressuring Zenon or allowing other companies to take over the development.

Port workers, Larnaca residents and the municipality have also protested against the issuing of licences to natural gas companies, who wanted to move logistical operations from Limassol to the Larnaca port, arguing that it will derail the port and marina development.

Communications and Works permanent secretary Alecos Michaelides went on the radio to refute reports that the government is abandoning the marina project in favour of the companies, saying that all licences issued are short term. “There is no mix-up or controversy here. This is a temporary arrangement and will only last until 2016,” he said. “Even if an investor for the marina development comes forth tomorrow, the infrastructure to accommodate large cruise ships won’t be needed until after 2016.”

He said that the government included a clause in most of the licences issued that stipulates that if the marina development commences then they will move their operation elsewhere. 
 “There is room for everyone to co-exist in the Larnaca port for a time. This is a temporary arrangement,” he reiterated, adding that Larnaca port will not become the “energy port”.

Michaelides explained that natural gas companies will operate in a more permanent basis either in the Limassol port or a new development nearby.

The permanent secretary underlined that the goal of the Communication and Works ministry is for Larnaca to become the largest passenger port in Cyprus.

Louroutziatis asked for a meeting with all party leaders, to make sure that the marina development goes through without obstacle.

Source: Cyprus Mail

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