Limassol Port privatisation process to be launched by the end of April, Minister says

Limassol Port privatisation process to be launched by the end of April, Minister says

The Limassol Port privatization will be officially launched by the end of April with a call for expression of interest, Minister of Communications and Works Marios Demetriades has said, adding that the project team is examining the possibility of attracting more than one investor.

Speaking to CNA, Demetriades said that prior to the privatization of Cyprus` commercial hub, the Ministry will proceed with a revision of the Cyprus ports` charges in line with international practices. He also assured that the rights of employees at Limassol port will be safeguarded.

A privatisations progamme, part of Cyprus €10 billion economic adjustment programme, includes the privatisation of the Limassol Port, the Cyprus Telecommunications Authority and the Cyprus Electricity Authority, aiming to garner €1 billion until 2016.

Rothchilds, the Ministry`s financial advisor in the privatisation process, already began 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 over the Limassol Port.

He added that this process also aims to clarify which port activities would be privatised, noting that there is a possibility for the process to include more than one investor.

“This has to do with our effort to maximize the benefits for the Republic of Cyprus and to increase the number of possible investors,” he said.

The Minister explained that an investor could be interested in the container terminal whereas an other investor in the loading/offloading operations or general operations.

Sources told CNA that a number of foreign companies have already expressed interest over the Limassol port, such as APM Terminals and DP World, both world-class corporations in container terminals with revenues in excess of €3 billion in 2014.

“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.

Licensing or concession agreement
Demetriades said the Ministry`s advisors are currently examining the legal method of privatisation, noting that the options under consideration are either a license contract or a concession agreement.

“Essentially we will provide the installations to private investors for a period of 25 years at least,” he said.

Demetriades said that Ministry officials and their advisors have already briefed the European Commission`s responsible Directorates for Competition and Markets on the process, which will maintain the Cyprus Port Authority as a public organisation with a supervising role.

Furthermore, Demetriades said the expansion of the Limassol port is under way by incorporating the adjacent Merra, an area under the jurisdiction of the British Sovereign Base.

“We believe that the expansion is very important as ports with no land area have no prospect of growing,” he said.

But he noted that this new area will not be included in the privatisation process as there is no time for the completion of the infrastructure.

“We assigned an advisor to examine the various options which may arise with regard to the area,” he said.

Demetriades also told CNA that the Ministry will revise the charges policy before the privatisation process is completed.

“We would like to revise the charges philosophy to comply with competitive ports because the current charging policy is anachronistic,” he said.

Meanwhile, according to CPA figures, 2014 saw a rise in commercial activity in the Limassol port, as a total of 307.600 containers (TEUs) have been transferred marking an 11% year on year.