Uncertainty surrounds a €1.2 billion development project for the Larnaca port and marina after Kition Ocean Holdings failed to renew a key guarantee.
This missed deadline comes despite the company’s commitment to President Christodoulides that the project would go on.
Transport Minister Alexis Vafeades warned that he will seek legal advice on Wednesday if the guarantee remains absent. “We need to determine whether the state is entitled to remain in a contract when a substantial term is missing. We have made incredible efforts,” Vafeadis told the Larnaca Development Committee. He revealed the government’s legal advice had been to terminate the contract prior to the President’s involvement.
A €10 million guarantee for the port’s operation expired on Jan. 31, 2024. Kition Ocean Holdings requested changes to development plans and argued for a reduced guarantee of €4.2 million. After a meeting with the President, the company agreed to the smaller guarantee pending a dispute resolution process.
Vafeades outlined a scenario where the state terminates its contract with the company. He emphasised that the port’s continued operation is ensured under the contract. “From day one, we will take over the operation of the port. From there on, everything will depend on the legal process that follows. There is a procedure that needs to be carried out. The most likely scenario is that there will be a legal process afterwards,” he noted.
The Minister clarified that penalties would precede a potential contract termination if the company provides the guarantee but fails to begin the project in June as required.
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