A supposedly multi-million investment deal with a Chinese company to develop the old Larnaca airport is dead, the government said yesterday.
“I would say it is finished for good,” Communications Minister Efthymios Flourentzos told reporters during a visit to Larnaca airport.
The minister said Hermes and the government will meet tomorrow with a view of coming out with a joint invitation to potential investors interested in developing the old airport building.
“The situation will develop according to what is proposed by those wanting to develop the site. It would be up to them to propose and we will evaluate the proposals and find one that is beneficial,” Flourentzos said.
Airports operator Hermes and the privately owned Chinese firm Far Eastern Phoenix had concluded a deal said to yield a €600 million benefit for Cyprus.
The intended investment concerned developing the old Larnaca airport into a large commercial showroom, bonded warehouses for Chinese goods as well as a small conference center.
Under the deal signed with Hermes, Far Eastern Phoenix would assume the management of the airport for the remaining duration of the concession agreement between Cyprus and Hermes - 19 years.
The Chinese company had asked for a longer term lease – 50 years – than the 19 years Hermes is able to give.
However, legal questions have been raised over whether the state could offer the Chinese firm a further 31 years without a tender process.
Extending the deal to 50 years would violate the principle of equal treatment, given that had other investors known about this possibility they might have expressed an interest.
Source: http://www.cyprus-mail.com
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