Limassol Port: A gateway for growth
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.