Cyprus Scraps $1.3 Billion Port Concession

May 27, 2024

Larnaca Marina source Kition Ocean Holdings
Larnaca Marina source Kition Ocean Holdings

Cyprus has scrapped a 1.2 billion euro ($1.30 billion) concession agreement for the development of Larnaca port, in a legal wrangle that the state and the contractor traded blame for on Monday.

Operator Kition Ocean Holdings held a long-term lease to develop and operate both a yachting marina and a commercial port in the southern port town.

The Cypriot government said Kition were in breach of contract for failing to renew a letter of guarantee. The company countered, saying in a statement that the government's action coincided with separate legal proceedings Kition had initiated to seek implementation of the concession agreement.

Larnaca is the staging post of a maritime shuttle of international aid into Gaza. The issue will not affect activity at the port, government officials said.

Kition Ocean Holdings had failed to renew a letter of guarantee for the project which legal authorities considered a contractual breach, Transport Minister Alexis Vafeades said.

"This effectively activates a process where the port and the marina... are reverting to the administration of the state," Vafeades said.

Kition Ocean Holdings said the government's decision was in breach of the terms of its agreement with the state. "We applied to the court two months ago to force the Government to follow their own agreement and to meet and solve the disputes in line with the agreement.

"The Government’s behaviour undermines the rule of law that should exist to protect investors," it said.


(Reuters - Writing by Michele Kambas; Editing by Jan Harvey and Jonathan Oatis)

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