Transport Minister Marios Demetriades announced on Thursday the companies selected to take over the commercial operations at Limassol port, but declined to disclose any details on the deal’s worth.
A consortium comprising EuroGate International GmbH, which has the majority holding, Interorient Navigation Company Ltd, and East Med Holdings S.A, is to be granted the concession for the port’s container terminal, the minister told reporters following a cabinet meeting.
A consortium consisting of DP World Limited (majority holder), P&O Maritime and GAP Vassilopoulos Public Ltd was picked to take over the port’s maritime services.
Lastly, the operations of the general cargo terminal were awarded to a joint venture comprising DP World Limited (majority holder) and GAP Vassilopoulos Public Ltd.
DP World this week signed two major construction contracts for its US$1.6 billion futuristic fourth terminal at Jebel Ali port. The Dubai company is one of the largest ports operators in the world.
Demetriades said the government is pleased with the competition process and also its outcome, adding that the selection of the preferred bidders marks the successful completion of the drive to privatise the commercial operations of Limassol port.
“The government is very satisfied with the economic aspect of the competition, the outcome has exceeded our expectations,” he said.
But the minister refused to be drawn on the euro value of the contracts, saying only that the deal the government secured is “very attractive” and that the calibre of the bidders constitutes a vote of confidence in the Cypriot economy.
Responding to persistent questions, Demetriades urged patience, adding that the government will be disclosing specific figures during a briefing of parliament scheduled for next week.
The deal requires the nod from the House plenum.
The container and general cargo contracts are for operations for 25 years, while the marine services contract is for 15 years.
According to the minister, the government’s plan is to sign the concession agreements by end-March. There would follow a transition period of six to nine months before the successful tenderers would officially take over operations.
Back in September, the minister said in an interview that the privatisation of the Limassol port would contribute a comparably small portion of the expected revenue from the government’s entire privatisation programme, which initially aimed at generating a total of €1.4bn.
Despite commentary in the local press that the minister was being cagey about the value of the port deal, it’s understood that the government was simply playing by the book, having been advised by lawyers not to reveal any details until after March 1, when the period for appeals by tenderers elapses.
Revenues from the port deal consist of two parts. There is the concession fee for the three operations, to be paid upfront once pen is put on paper. This figure, already revealed, is around €9 million in total.
But the lion’s share will come from the government’s cut on the revenues of the concession-holders down the years.
On January 21, the transport ministry announced receipt of 14 bids for the commercialisation of Limassol Port, as some of the 10 bidders had expressed interest in more than one contract.
Among the bidders were global multinationals Cosco Pacific of China, and Philippines-based ICTSI.
Industry insiders, speaking on condition of anonymity, told the Mail that interested companies initially included the likes of shipping heavyweights Maersk, and MSC, a world leader in global container shipping. Both companies were interested in the container operations at Limassol.
But they subsequently dropped out, apparently disillusioned with some of the conditions set by the transport ministry, for example regarding the pay and other employment conditions guaranteed to port workers post-privatisation.
Awarding the concessions to either Maersk or MSC would have had an additional benefit to Cyprus, the same sources said, since these companies might then be inclined to make Limassol their transshipment hub for the eastern Mediterranean.
Maersk currently use Egypt’s Port Said as their transshipment hub, while MSC use the port of Piraeus.
