LIMASSOL PORT: On track with privatisation of services

achieve that to do it more efficiently and more effectively, we need it to operate not as a department of a ministry, but as an administration or as an agency, and this is what they do abroad.

“Regarding the Deputy Minister (for Shipping), have in mind that the only country that has this concept is Greece. In all the other countries it is under the Ministry of Transport, but what they do have is more flexibility, either as an agency or an administration. We need to give the necessary flexibility to the department to have a different mentality, to be more focused on the development, to be more flexible in serving the needs of the ship owners and the shipping sector, which they are doing very successfully, just as in countries like Malta, the U.K. and Ireland. In Greece, they have the Deputy Minister, but that office is also responsible for the ports and the coastline, so we are talking about an entirely different thing.

What I have included in the guidelines of the people doing the restructuring study is for the Department to be more independent, to be more flexible. I have already discussed this with the industry as well, and I will have further meetings with them. So, we are already acting on it.

“Regarding the short term, we are also introducing a number of measures, including a more professional way to promote shipping, using for example a specialist company, strengthening regional offices. We don’t need any more inspectors, what we need is additional people for business development. Introducing a package for companies that would like to settle in Cyprus, within the shipping sector, bringing in the private sector in promoting our flag, and also some operating improvements that will give more service our clients, the ship owners.

“One of the first things I did, was to bring the private and public sector together. And we came up with this EY study, whom we brought in through a tender. This is a study financed by the government, by CIPA, and I would like to thank its chairman, Christodoulos Angastiniotis personally. Some of these ideas are included in my proposals to the Council of Ministers.

“I have tasked a steering committee to come up within three months with a package that we could offer to companies willing to settle in Cyprus within the maritime sector. I do believe that we need to attract as many companies as possible to the island, because in this way of course we are promoting employment, and having a real impact on the economy.

“Of course in Malta they have a much bigger number of ships registered under their flag, and Greece of course, but they don’t have the big cluster (in Malta), whereas we do, and we need to enlarge that cluster as much as possible. In Greece they have about 200,000 people employed in their maritime cluster, whereas we have 4-4,500. There is potential for growth in our cluster, definitely.

“I have asked for some additional included in the study and asked EY information to be to not only do a comparison of the shipping sector with other centres, but also to come up with what specific incentives provided to companies within the maritime sector, and give this to the steering committee.

“The shipping sector is vital to the economy. It had a large growth in the first years and it has been stable in the last years. We need to know the real reasons and not to come up with things that we don’t really understand. We have to be honest with ourselves. There’s no magic solution for shipping. It will be a slow and painful process, but we can definitely do more things to promote shipping. And we definitely want shipping to be a bigger part of our GDP. And we can do that. I’m very optimistic, otherwise, I would not spend so much time on shipping.

“Our tax system is a very attractive one, it is approved by the European Union, and we will not see any changes. And this is what companies need, they need stability. The taxation is very good, but they need other incentives. I don’t want to predetermine the package, but I’m talking about getting easily work permits, for example the one-stop-shop should be a major part of this package.

“For the package for companies, I have called a meeting in April with the private sector, I will give the EY report, and I will tell them come up with a specific package within three months, I want to have it before the end of the summer so that we can implement it.

“For example, AC Nielsen had two major centres in Europe – one in Geneva and one in Oxford. One of the reason they went to Geneva was that they were offering lower taxation for the managers of the company. It was part of the package. It was not specific to the company. For example, I would like to see more ship owners and managers based in Cyprus.”

“We are proceeding with the privatisation of services at Limassol port and we are on track. We have Rothschild as financial consultants and concluded with the legal consultants. By the end of April we will go for tenders, by the end of the year to definitely find investors, maybe this will take up to the end of March (2016) to sign all the contracts and complete all the paperwork. But we should more or less finish by the end of the year or beginning of the next.

“There is interest for the port, let’s wait and see how it will materialise. I am optimistic.

“In the case of Larnaca, if everything goes well, in the summer they will start working in the port. There was a problem with the funding, now I think Zenon joint venture is working on this. As regards the claim that the operator was already cashing in on port fees and revenues, we involved the auditor general to make sure the contract would satisfy the original terms, and there would not be any deviation. It is our job to make sure the interest of the Cyprus Republic are protected.

“But what I will say to the unions, because they have been on strike and nobody knows why, that everyday we have strike at the port we lose 1 mln euros in income for the economy, so they should be very careful when they stage their strikes. I had several meetings with them, I assured them that their basic rights would be protected. The right of strike should be utilised, but in the ports and shipping sector, they should be three and four time careful before going on strike.