Our View: A new future for Larnaca port but it comes with risks
AFTER years of failed tenders and aborted plans for the redesign and development of the Larnaca port and marina, the joint venture of Kition Ocean Holdings has submitted an ambitious proposal that is estimated to cost more than one billion euros to deliver. The final proposal is the result of lengthy negotiations between the company and the government and will pave the way for the upgrading and expansion of Larnaca port and the construction of a new marina complex.
The port had fallen into disuse for close to 30 years after the restrictive practices and high charges imposed by dock workers drove away the transit cargo business it relied on. Kition Ocean Holdings plans to redesign and modernise the port and attract new business such as commercial cruises, transport and energy companies. This may be a risky venture, but as long as private capital is undertaking this risk the project should be welcomed as it will create jobs, attract new business and give a boost to economic growth in Larnaca.
The bulk of the investment will go on the marina development which will be along the lines followed by the other marina projects – restaurants, hotels, commercial spaces, luxury residences. There will also be an educational and medical centre, described by the company as unique, but otherwise it will be the tried and tested marina model that has been followed in Limassol and subsequently Ayia Napa. Another marina is also being planned in Paralimni.
Is there a danger of the marina market becoming saturated? Will there really be such high demand for yachting berths in Cyprus that all marinas can be financially viable? Admittedly, the companies undertaking these projects hope to recoup their investments from the sale of villas and the revenue from restaurants and hotels they build, but we still believe questions of sustainability should be raised and be convincingly answered by the authorities. For instance, will there be demand for luxury villas next to a port – it is adjacent to the marina – that services the energy industry?
These are business questions that the investors have probably already answered as they would not have been willing to pour in so much money into the project. Are the authorities, which insisted that the contractor should take over the port and marina, satisfied with the plans or have they decided to sign off on the project, because it had got nowhere for years? We can only hope that all the studies have been carried meticulously because everyone wants the project to succeed.
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