Li­mas­sol Port: A gate­way for growth

Financial Mirror (Cyprus) - - FRONT PAGE -

In the last three years there was a con­cen­trated ef­fort to lead our econ­omy into re­cov­ery. An ef­fort that has pro­duced tan­gi­ble re­sults thanks to the hard work, sac­ri­fice and ma­tu­rity of the Cypriot peo­ple. The path to change and re­form that theGovern­ment fol­lowed was a chal­leng­ing one. We un­der­took this jour­ney un­der a tight timetable that was agreed with our part­ners and in­ter­na­tional cred­i­tors. This jour­ney, fol­low­ing a series of mile­stones, led us back to growth.

One such mile­stone, of sig­nif­i­cance to the fur­ther de­vel­op­ment of the econ­omy of Cyprus, is the com­bi­na­tion of the in­sti­tu­tional strength of the public sec­tor with the com­mer­cial strength of the private sec­tor.

To this end, we set two ob­jec­tives: iden­ti­fy­ing op­er­a­tors who would de­velop the com­mer­cial ac­tiv­i­ties of the coun­try’s main port, Li­mas­sol Port, and re­struc­tur­ing and mod­ern­iza­tion of the op­er­a­tions of our ports. These are ob­jec­tives that needed to be met within the time­frames agreed with Troika as a con­tri­bu­tion to­wards the re­form agenda and the exit of the coun­try from the sup­port mech­a­nism un­der the lead­er­ship of the Min­istry of Fi­nance.

To­day, just ten months af­ter the launch of the com­mer­cial­i­sa­tion process, this event marks the achieve­ment of these ob­jec­tives. Our coun­try’s econ­omy has gained a new gate­way for fu­ture growth. A new era be­gins for Li­mas­sol Port.

We fol­lowed a trans­par­ent and well doc­u­mented process. The suc­cess is con­firmed both by the qual­ity of in­ter­ested par­ties and also the broad par­lia­men­tary sup­port in the House.

Our com­mer­cial and fi­nan­cial ap­proach was a key in­gre­di­ent to the suc­cess­ful com­ple­tion of the project. The re­sult of our over­all ap­proach was the in­ter­est ex­pressed by rep­utable and ex­pe­ri­enced op­er­a­tors which strength­ened the com­pet­i­tive dy­nam­ics en­abling us to achieve a very favourable out­come.

In this project, Cyprus has man­aged to at­tract two lead­ing global play­ers, mark­ing a sym­bol­icin­vest­ment axis that ex­tends from North­ern Europe to the Mid­dle East, con­firm­ing its role as a regional hub of the East­ern Mediter­ranean.

The con­ces­sion­aires, Euro­gate and DP World, are con­sor­tia rep­re­sent­ing part­ner­ships be­tween strong­in­ter­na­tional and lo­cal com­pa­nies that will work to­gether with the Min­istry of Trans­port, Com­mu­ni­ca­tions and Works and the Cyprus Port Author­ity, in its new role as the In­de­pen­dent Reg­u­la­tor, to de­velop the ac­tiv­i­ties and the as­sets of the Li­mas­sol Port.

As per the con­ces­sion agree­ments, the state re­tains own­er­ship of the Li­mas­sol Port. The con­ces­sion­aires cap­i­talise on their ex­pe­ri­ence and know-how to en­sure the fu­ture de­vel­op­ment via growth of com­mer­cial ac­tiv­i­ties and the i mple­men­ta­tion of best op­er­a­tional prac­tice. The es­ti­mated eco­nomic ben­e­fit to the state, in pro­ceeds and­in­vest­ments, dur­ing the tenor of the agree­ments is ap­prox­i­mately 1.9 bil­lion euro, based on the busi­ness plans of the con­ces­sion­aires. The amount ex­ceeds the ini­tial ex­pec­ta­tions of the govern­ment, while the ben­e­fi­cial con­se­quences to the Cypriot econ­omy from the increased ac­tiv­ity of the Li­mas­sol Port for the Cypriot econ­omy can­not be un­der­stated.

Li­mas­sol and the Cypriot econ­omy will ben­e­fit from the mod­erni­sa­tion and op­er­a­tional up­grade of the Port as the Op­er­a­tors have un­der­taken to in­vest, in in­fra­struc­ture and sys­tems that will de­liver im­proved con­nec­tiv­ity and bet­ter ser­vice to the users.

The agree­ments are not only a source of rev­enue for the econ­omy but also the cul­mi­na­tion of a project of vi­tal im­por­tance to the growth prospects of our coun­try. This project:

- This project is a mile­stone as it is the first ma­jor com­mer­cial­i­sa­tion of its kind and the sec­ond large con­ces­sion agree­ment com­pleted in Cyprus.

- Strength­ens Cyprus’ po­si­tion as a mod­ern and se­cure in­vest­ment des­ti­na­tion in a part of the Mediter­ranean where the in­vest­ment risk is in­creas­ing.

- Up­grades Cyprus’ role in the South East­ern Mediter­ranean pro­mot­ing it as an im­por­tant regional cen­tre of mar­itime com­merce within the greater re­gion.

- I mproves public fi­nances as the state re­tains its own­er­ship rights and col­lects an­nual in­come for the tax­payer in the form of fixed as­set rents and vari­able rev­enue roy­al­ties, and of course, tax rev­enues from the op­er­at­ing en­ti­ties, while be­ing re­lieved of the in­vest­ment cost and risk, which are as­sumed by the con­ces­sion­aires.

- Strength­ens the com­mer­cial ac­tiv­ity, which will feel the ben­e­fits from the lower costs and the increased con­nec­tiv­ity.

- Cre­ates new jobs drive by the ex­pan­sion and de­vel­op­ment of the port’s op­er­a­tions.

This de­mand­ing process would not have been pos­si­ble with­out the hard work of all the par­ties in­volved. The ex­cel­lent per­son­nel of Min­istry, the ad­vis­ers, the man­age­ment and em­ploy­ees of the Cyprus Port Author­ity and other re­lated in­sti­tu­tions, each played a sig­nif­i­cant part in achiev­ing im­pres­sive re­sults, keep­ing to strict time­lines. We thank them all warmly. I am cer­tain that this new era will live up to ex­pec­ta­tions.

The course of a life­time and cer­tainly of pol­i­tics is de­ter­mined by ones at­ti­tude and choices in the face of great chal­lenges. This is what urges us to dare to take the next step , to seize the op­por­tu­ni­ties, to put in prac­tise what we call our dreams.

Cyprus, with the agree­ments be­ing signed to­day, yet again demon­strates its strength. It can look into the fu­ture and cre­ate new prospects for the so­ci­ety and the econ­omy.

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