Bids re-open for old port 10-year lease

Financial Mirror (Cyprus) - - FRONT PAGE -

The Cyprus Ports Author­ity, the state owner and op­er­a­tor of the is­land’s main com­mer­cial har­bours, is re-invit­ing ten­ders for the Li­mas­sol Old Port fa­cil­i­ties, that had only re­ceived one bid­der last Au­gust for the ten-year deal worth EUR 26 mln.

A Cypriot ex­pa­tri­ate with busi­ness in­ter­ests in the U.S. was the sole bid­der, clinch­ing the ten-year ten­der for an an­nual lease of EUR 2.6 mln, 300,000 eu­ros more than the min­i­mum of­fer. But gov­ern­ment sources said that the in­vestor had soon backed out of the bid.

The Cyprus Ports Author­ity had given out to ten­der the ground fa­cil­i­ties of the old port in June 2014, which was ren­o­vated in re­cent years at a cost of EUR 17.8 mln, more than dou­ble the ini­tial cost of 8 mln that was planned in 2010. The new ten­der is avail­able at www.cpa.gov.cy .

The old port, that in­cludes 18 new build­ings and two that were re­cently ren­o­vated, cover a com­mer­cial space of 5,800 sq.m. and was of­fered in an open ten­der for a ten-year lease up­wards of EUR 2.3 mln a year, with an op­tion to re­new for a fur­ther ten years.

The new in­vestor was ex­pected to un­der­take to rent out the fa­cil­i­ties to third par­ties, but also to main­tain and re­pair the build­ings.

One of the two ren­o­vated build­ings will house a win­ery and the other will be used for ex­hi­bi­tion pur­poses. The 18 new build­ings will house four restau­rants, bars and cafés, three tav­er­nas, three snack bars, 17 shops and seven floors of of­fice space.

The old port project also in­cludes a build­ing that houses the Fish­eries Depart­ment, as well as a fish­er­men’s cove as the fa­cil­ity will con­tinue to op­er­ate as a fish­ing har­bour and fish mar­ket. The Fish­eries Dept. will be re­spon­si­ble for the an­chor­age of the fish­ing and other ves­sels.

The project area also in­cludes a pi­azza-square, park­ing spa­ces and a deck and public bridge from where pedes­tri­ans can look onto the har­bour area, as well as the ad­ja­cent newly built Li­mas­sol Ma­rina.

Mean­while, the Min­istry of Com­mu­ni­ca­tions and Works has sub­mit­ted to par­lia­ment a re­vised ten­der doc­u­ment for ap­proval, to de­velop the com­mer­cial op­er­a­tions of Li­mas­sol port, the big­gest in Cyprus and part of the gov­ern­ment’s pri­vati­sa­tion plan that needs to raise EUR 1.4 bln in four years. Nether­lands-based APM Ter­mi­nals and Dubai’s DP World were said to have shown in­ter­est, with the gov­ern­ment aban­don­ing ear­lier plans for pri­vati­sa­tions, and now opt­ing be­tween a li­cens­ing agree­ment and con­ces­sion.

Trans­port Min­is­ter Mar­ios Deme­tri­ades, who han­dles the port­fo­lios of both trans­port and mar­itime, had ini­tially said that the pro­ce­dure for pri­vati­sa­tion of the com­mer­cial ser­vices at Li­mas­sol Port would get un­der­way by the end of April, a dead­line later moved to end-May and now pending be­fore par­lia­ment.

Al­ready, con­sul­tants Roth­schild have em­barked on a mar­ket sound­ing process in a bid to as­sess mar­ket in­ter­est. Deme­tri­ades said that prom­i­nent cor­po­ra­tions in port and cargo ter­mi­nals man­age­ment have ex­pressed in­ter­est for the ser­vices at Li­mas­sol port.

“I be­lieve the in­vestor will be se­lected by the end of the year and the process will be com­pleted by the first quar­ter of 2016,” Deme­tri­ades said.

He said the Min­istry’s ad­vi­sors are cur­rently ex­am­in­ing the legal frame­work for pri­vati­sa­tion, not­ing that the op­tions un­der con­sid­er­a­tion are ei­ther a li­cense con­tract or a con­ces­sion agree­ment for a pe­riod of 25 years. Global ad­vi­sors Pin­sent Ma­sons LLP had been se­lected ear­lier in 2015 to pro­vide legal ser­vices to the gov­ern­ment, aimed at the suc­cess­ful com­ple­tion of the process of li­cens­ing of all or part of the com­mer­cial op­er­a­tions of the Li­mas­sol Port.

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