The government received 33 written expressions interest in the privatisation of the port and next week the Cyprus Ports Authority (CPA) will invite the shortlisted companies to submit formal bids.
APM Terminals is a large port operator headquartered in The Hague, with 200 port and inland services operations, while state-owned COSCO is a large Chinese company specialising in global shipping, modern logistics, shipbuilding and repairs.
Earnings at Limassol port alone are currently about €20 to €25 million per year. A few years ago the port was recording losses but the government expects the new operator to be able to increase profits to up to €100 million, owing to investments in infrastructure and superstructure upgrades, such as modern equipment, better cranes, and berthing of larger vessels.
A 500-metre extension of the western basin quay is due to be completed in the first half of 2016, while the passenger terminal is undergoing a new 6,800-square-metre expansion.
Limassol port, which handles around 2,000 vessels per year and nearly 18,000 tonnes, has become uncompetitive compared with regional rivals such us Piraeus, Malta and Haifa, despite the island’s maritime fleet of around 1,800 vessels being among the top 10 in the world.
However, 2014 saw a rise in commercial activity, with container traffic increasing by 11% in to 307,600.
Long-term lease
According to the privatisation plan approved by the Council of Ministers, Limassol port will be leased to a port operator. Licensing is expected to be completed by the first quarter of 2016. The Cyprus Ports Authority (CPA) will remain a public organisation and retain a supervisory role.
“The tender is in three parts: the licensing for the container terminal, licensing for the provision of maritime services and the licensing for a multi-purpose passenger terminal,” a person close to the matter said.
The licence for the container terminal and multi-use terminal is expected to range from 25 to 30 years and the licence for maritime services from 10 to 20 years.
Limassol port’s commercial operations are part of the €10 billion bailout programme with the Troika of international lenders. Under the Memorandum of Understanding with the Troika, Cyprus is due to raise €1.4 billion by 2018.
Port privatisation has been resisted by porters, who have disrupted port operations by going on strike or implementing ‘go-slow’ work practices. In an effort to sweeten the deal the government added €41 million to the CPA budget earlier this month to cover compensation for port workers and voluntary retirement.
The government has told all the CPA staff that they will remain or be moved to other services while licensed port workers and dock workers will receive compensation or maybe re-hired by the new operators.
Source: InCyprus
