The Audit Office has objected to a verbal agreement between the state and airports operator Hermes paving the way for a five-year extension to their 25-year concession signed in 2006.
That is, allowing Hermes to operate Larnaca and Paphos airports up until November 2036.
Specifically, the compromise formula between the government and the company – which has not yet taken the shape of an agreement – provides for Hermes to go ahead with the second phase at the cost of €150 million provided for in the original contract.
At the same time, the Republic will agree to an extension of the duration of the concession contract in order to facilitate the financing of the company by lenders.
Also, it provides for some compensations to the company over the coronavirus pandemic and over the consequences of the sanctions against Russia.
The Audit Office considers that by extending the time-period of managing the airports, the company will have a great financial benefit at the expense of the tax payer.
In fact, the calculated profits from the possible extension time are about €742.5 million, according to the Audit Office.