The concession agreement was a compromise from the government’s initial plan to fully privatise the port and generate much needed revenue from the sale of underutilised assets, such as telco Cyta and electricity utility EAC.

The Cyprus Ports Authority will remain as landlord and regulator of port services.

The transition in Limassol from the signing ceremony in April last year, that also saw the government compensate agents and handlers dearly, was not without its problems in the first few days of operation.

The teething problems had more to do with administrative workload that truckers faced on the first day, resulting in a long queue of about 200 lorries waiting to enter the port.

“The transition to the new regime went smoothly. As expected, some problems arose which are expected to be resolved within reasonable time,” the competent Ministry of Transport said in an announcement issued on Tuesday.

“The Ministry, in cooperation with the new operators, will do its utmost to resolve any issues that will arise. The commercialisation of Limassol port is an ambitious project which will bring significant benefits to our country,” the statement said.

“It is a project of strategic importance as, not only will it improve the competitiveness of the port over the next decades, but it will also contribute to the further revival of the economy and increase on the rates of growth,” it concluded.

After competitive bids had been received in late 2015, the consortium of Eurogate International GmbH (majority participant), Interorient Navigation Co. Ltd and East Med Holdings S.A received the concession for the container terminal, and the consortium of DP World Ltd (majority participant) and G.A.P Vassilopoulos Public Ltd received two separate concessions for the operation of marine services (with P&O Maritime) and of the multi-purpose terminal.

Terminal renamed – action plan

The terminal is now renamed ‘DP World Limassol’ and the management team has triggered an action plan to turn the business into a sustainable asset for the Cypriot economy with new investment being a priority, the new operator said in an announcement.

The terminal’s activities include break-bulk, general cargo, ro-ro, oil and gas, and cruise ship services.

“DP World Limassol’s team has been working alongside the Cyprus Port Authority to prepare for the transition from a government managed terminal into the new DP World business model. The team is now putting months of planning into action to make the terminal more reliable, safer, and productive for customers,” the announcement added.

“We are now open for business and the terminal is functioning well,” said Charles Meaby, General Manager, DP World Limassol.

“The team at DP World Limassol is working very hard to ensure this period of change goes as smoothly as possible for our customers. We are all dedicated to adding value and giving a better service than ever before. We will be talking and listening to our customers to ensure they understand the progressive and incremental changes we are undertaking to make the terminal safer and more user friendly.”

Meaby added that “everyone is determined to deliver a better service for port users and we will continue to make improvements. Our mission is simple, we want to create the future of Cypriot trade and make trade easier, safer and at less cost. We have now passed an important milestone on the way to making the terminal a sustainable and highly valued asset for the Cypriot economy.”

He added that DP World has a portfolio of 77 operating marine and inland terminals supported by over 50 related businesses in 40 countries across six continents with a significant presence in both high-growth and mature markets.

“Chaos” said opposition DIKO

Initially, the opposition Democratic Party (DIKO) said that there was chaos at the port just before the transition to the new management, saying that there was great confusion on important aspects of the operation of the port, such as the new tariff charges, the new service sectors and the administration of staff.

The party said that social partners had been asking for dialogue with the Ministry of Transport for about a year, already, to resolve outstanding issues.

“Unfortunately, there was no discussion. The Ministry broke its promise to conduct a comprehensive dialogue on all issues and the Minister himself refused any extension to the changeover in order to resiolve outsnading issues.”

DIKO said its deputy, Georgos Prokopiou, will raise the matter at the next parliamentary Transport Committee session.

In response, the Ministry said that the new tariff were published far indavnace, in January 2016, and called for close cooperation between the private sector and al.l involved parties in the shipping industry.

On Tuesday, it issued a second announcement, this time in response to harsh crityicism from the left-wing AKEL party’s mouthpiece, daily Haravgi.

The Ministry explained that the new tariffs are charged per container, regardless of of goods, differing from previous Ports Authority charges that varied by product category.

It added that the new rates have thus been simplified and now depend on the number of days and is now more transparent than before.

Agents’ concerns

The Shipping Agents’ Association expressed concerns over the smooth operation of the port and an increase in the fees announced by the new operators.

“As things are moving forward it seems that we are all under too much pressure because as far as the preparatory work done in the port by the three new operators, at least servicing the vessels and the cargo will not be able to go ahead as expected,” Head of the Association, Lefteris Kouzapas was quoted by the Cyprus News Agency as saying.

He added that a solution must be found for increases in fees which are too great, noting that the association has proposed for the existing fees to remain unchanged for at least three months, a proposal which was not accepted.

In December, the Cyprus Shipping Association (CSA) said during the annual general meeting un Limassol that the commercialisation of Limassol port can only be complete once the new operators reach mutually acceptable agreements with local stakeholders that safeguard their rights and responsibilities as Cyprus shipping enters a new era.

Transport Minister Marios Demetriades was reassuing at the meetingm, saying that “the commercialisation of the Limassol port, as well as other reforms and growth oriented policies put forward by the government, are in the right direction for the much needed modernisation. I would also like to point out, that the success of any effort relies on finding common grounds while collaboration and good faith are necessary from all stakeholders”.

Analysing at length the various issues affecting Cyprus’ ports and shipping industry more generally, CSA President Reginos Tsanos provided an overview of the state of play of negotiations with the new operators of the Limassol port, pointing out that, despite some consensus being achieved, key issues such as the legal standing of Cyprus’ stevedores, the level of the stevedoring cost, and marine fees incurred by vessels calling at Limassol Port, remained unresolved.

Transhipment hub

Speaking about the CSA’s aim of establishing Cyprus as a transhipment hub, he said that “Limassol port has already started handling transhipment cargo associated with the energy sector, including cargo that will be used for the exploitation of the Zohr gasfield in Egypt. The transformation of Cyprus into a transhipment hub for the supply of energy companies in the eastern Mediterranean region requires important and immediate decision-making by all”.

The CSA’s position was backed by both trade union bosses and key industry leaders. Both Andreas Matsas and Bambis Kyritsis, the heads of the largest and most rigid unions SEK and PEO, both pointed out that they stand together with the CSA in safeguarding the stevedoring profession, and offered their full support as and when required. Similarly, Phidias Pilides, President of the Cyprus Chamber of Commerce, and Christos Michaelides, President of the of Employers and Industrialists Federation, both hailed the long-standing role that the CSA has played in supporting the shipping sector in Cyprus.

Transport Ministry Permanent Secretary, Alecos Michaelides, had said earlier that this project is the second largest public private partnership (PPP) in Cyprus, following the construction and operation of Cyprus’ two airports.

Thomas Heinrich Eckelman, President of Eurogate International said at the signing ceremony in April last year that the organisation aspires to increase its capacity to 500,000 TEUs over time.

Noting that the corporation capacity in the Mediterranean is 5 million TEUs in 2015, Eckelman said he aspires to increase the volume to 5.5 mln TEUs after operating the Limassol container terminal in the years to come.

On his part, Sultan Ahmed bin Sulayem, President of DP World, said the company believes it can add value and growth to Limassol port.

“One thing about DP World, we always like to see growth and unless we see growth in any case we would not be interested to be here,” he said.

Source: FinancialMirror