Companies category powered by

Alarm raised over the future of Larnaca’s marina and port - Kition's position and the government’s next move

The largest investment planned in Cyprus, the €1.2 billion unified development of Larnaca’s port and marina, is at risk of being shelved.

The project appears to be hanging in the balance as a result of a dispute that has arisen between the state and the contracting company, Kition Ocean Holdings.

The dispute has assumed legal dimensions, as the contractor company has appealed to the courts, mobilising both the Government and the Larnaca’s local authorities. President Nikos Christodoulides has expressed his readiness to meet a delegation of Kition Ocean Holdings, declaring, however, that "the state cannot be blackmailed."

Speaking to InBusinessNews, the Minister of Transport, Alexis Vafeades, stated that the meeting between President Christodoulides and the contractor company is expected to take place after April 22, as he is abroad until next Tuesday, while, in a week, the President of the Republic will be out of the country.

The essential dispute with the contractor company

Asked about the dispute that has arisen, the Minister of Transport explained to InBusinessNews that the contract between the state and Kition Ocean Holdings stipulates that the contracting company must have three letters of guarantee in force.

"On 31 January, one of them had to be renewed, but the contracting company did not do it," he added, underlining that "we say that this constitutes a violation of an essential term of the contract, and that's why we asked the company on four different occasions to satisfy this condition, so that this violation will end. But it has not responded so far."

Along with the non-renewal of the guarantee letter, added Vafeades, "the contracting company has submitted a list of requests, which it claims we should consider".

"On our part, we have emphasised that these two issues are not interconnected. They are two separate issues. One is a clear breach of an essential term of the contract and must be removed immediately.

The other concerns something that must be referred to the competent Committees that manage such matters to be evaluated. And we have emphasised to the contracting company that we are willing to look constructively at every request, provided, however, that it is legal and that it is in the public interest. Then yes, of course, and we will try to see how we can help," the Transport Minister further stated.

However, according to Vafeades, in order for this action to continue, i.e. the examination of the company's requests, the issue that has arisen with the guarantee must first be remedied.

"The contracting company, unfortunately, refuses to do so and therefore we have resorted to the Law Office of the Republic and asked for legal advice on what the next steps should be, because now the issue is purely legal," he underlined.

Asked about the company's legal action, the Minister of Transport indicated that "the company has appealed to the court, because when we sent them letters, asking them to renew the guarantee, we warned that if this violation continues there is a possibility that we will have to terminate the contract and redeem the other two guarantees".

The contracting company, he added, has appealed to the Court and secured a unilateral decree, according to which the state cannot redeem the next two bonds until the views of both parties are heard in the Court, which will take place on Monday, 15 April.

"The company is not willing to fulfill its obligations"

Asked to comment on whether he is optimistic that the whole project will proceed, the Minister of Transport emphasised that there is an agreement.

"The state has agreed on some actions with the company. That is, for the company to do some work and get something in return, either payment or something else. Also, based on the agreement, each party has its obligations and the state has so far fulfilled all its obligations."

“Now if the other side does not intend to fulfill its obligations, it is up to them to prove that they will fulfill them. So far, unfortunately, the company has shown that it is unwilling to fulfill its obligations and we have therefore been forced to turn to the Law Office of the Republic for advice on how to proceed. Because when one side does not comply with the terms of the contract, then the problem grows," concluded Vafeades.

MARINA_LIMANI_LARNAKAS.width-800

Larnaca Chamber expresses strong concerns

It is worth noting that the whole matter is also of great concern to all the institutions of Larnaca, with the president of the city's Chamber of Commerce and Industry, Dr. Naki Antoniou, telling InBusinessNews that "we are very concerned about the issue, which, in essence, emerged after our own actions."

"We sent a letter to the contractor on 28 March to let us know how the whole project is progressing and the CEO informed us about the dispute with the state and that they want to negotiate some things with the state, but the state refuses to discuss them and therefore he asked for our help. That's where the whole situation actually started," Antoniou added.

Referring to the project, Antoniou said that "it is the biggest investment that will be made in Larnaca and unfortunately at the moment Larnaca is a prisoner of a contract about which we do not know the terms or the clauses".

At the same time, he indicated that "it is a very necessary project for Larnaca and we, as a private enterprise, have given assurances to foreign investors that this project will be carried out, that it is progressing normally and in case it does not progress, we will all be left exposed."

"I repeat, we are very concerned and we hope that the issue that has arisen will be resolved," he added.

Asked if the Larnaca Chamber of Commerce and Industry is invested in the meeting of the President of the Republic with the company, Antoniou answered in the affirmative.

"Of course. Any meeting that takes place is positive. Certainly, various meetings must be held with all agencies, with the aim of progressing and completing the project. It is not in anyone's interest for the confrontation and the matter to take the legal path, because such a thing entails a 3-4-year delay in the implementation of the project," he added.

According to the president of the Larnaca Chamber, "in consultation with the Mayor of Larnaca, the City Development Committee will have a meeting with the Minister of Transport on Friday, 19 April, while we will also schedule meetings with other agencies."

"Anyone who can help move this investment forward, this very big project, is welcome. The Chamber, the Mayor of Larnaca and the MPs of our province, we are ready to help in any way we can to advance the project," Antoniou concluded.

MARINA_LARNAKAS.width-800

The conflict goes to Parliament...

It is noted that the difference between the state and the contractor company, which threatens to blow up the large investment, is also going to be discussed in the Parliament, with the President of the House Audit Committee, Zacharias Koulias, announcing that the issue will be examined ex officio.

As he said, a letter will be sent to the Minister of Transport and Communications, requesting the submission of the contract between the state and the Kition consortium.

At the same time, Koulias asked the Auditor General, Odysseas Michaelidis, to prepare and submit a report to the Commission.

Aroundtown SA

It is recalled that the major shareholder in Kition Ocean Holdings is Aroundtown SA, which entered the company with equity capital acquired from REM International (Cyprus) SA.

It is a major player in the European real estate market and a company listed on the German stock exchange, financing large-scale projects with a focus on quality producing properties with added value prospects, in central locations in leading European cities, mainly in Germany and the Netherlands.

The realisation of its investments being is done through the subsidiary public company Grand City Properties SA ("GCP"), which is mainly active in the German real estate market.

(Source: InBusinessNews)

Read More

Ayia Napa marina to set up giant outdoor screen for EURO final
Ad Tag Global Group opens headquarters in Larnaca
AEGEAN carried 4.4 million passengers in Q2
Influx of nominations for CBN Young Dragon Awards continues
AstroBank opens new branch in Dali
Purpose Communications' second cycle of Purpose Academy is about to begin
The buildings taking Limassol onwards and upwards
Official data show increase of economic activity in all sectors in 2022
Real estate investment opportunities by AstroBank in Paphos, Famagusta and Nicosia
7th edition of The Cyprus Journal of Wealth Management now available