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Limassol port companies to be paid $31m in compensation ahead of privatisation

Limassol port companies to be paid $31m in compensation ahead of privatisation
Stevedore companies in the Cyprus port of Limassol will get EUR28m in compensation for their licenses, equaling EUR1m for each of the 28 companies, lifting the final hurdle to the tendering out of port services to private bidders.

Confirming the deal, Cyprus Transport minister Marios Demetriades said a preliminary agreement with the Limassol stevedores should be signed “within a few days”.

The government, acting as landlord and future regulator of the island’s commercial ports, will provide a further EUR3.6m to the port companies operating in Larnaca port, once the management agreement has been concluded with finalist Zenon Consortium. However, Demetriades said we have to be patient for an agreement in Larnaca.

Port workers have secured their deal after vigorously opposing “denationalisation” staging strike action, which has sometimes closed the ports for days and led to the country’s businesses to call for a law regulating strikes at essential services.

Chairman of the government-owned Cyprus Ports Authority (CPA) , Alecos Michaelides has long maintained Limassol is the country’s “only economic lung”.

Now the CPA will move ahead with the tendering of three services at Limassol port. For the container terminal a 25-30 years concession deal is foreseen, for marine services, one of 10 to 20 years and, for the passenger and commercial terminal one of 25-30 years.

Competition will be keen with some 70 companies already indicating they are ready to submit an expression of interest by the 17 July deadline.

Limassol is the island nation’s main commercial port capable of docking vessels up to 340 m in length and handles all of the container traffic and accounts for 40-50% of total cargo by tonnage.

Nearby Vassiliko port is an exclusive cement exporting and oil storage facility that handles the rest of the island’s cargo by tonnage.