It is good to see that the government has drawn the right lessons from the Larnaca port and marina fiasco. It has abandoned the grandiose plans of making the development part of a single project, that also included a residential development and had an estimated cost well above a billion euro.
The huge cost of the project was the reason Kition Ocean Holdings, that had won the contract for the project, eventually pulled out – it considered it economically unviable, which was why it kept putting off the start of any major work and then came up with the proposal of first building and selling the residences to raise funds.
As we have written before, bureaucrats and politicians lose sight of the smallness of Cyprus and its limited income-generation capacity, thus making unrealistic project demands which restrict the number of bidders. The government has shown it has no intention of repeating this mistake and has broken the project up into three smaller ones, while putting the decision on the port on hold.
Transport Minister Alexis Vafeades, who said he wanted to involve local authorities in the projects, presented the government plans on Monday. Tenders would be invited for the upgrading and maintenance of the marina, with the specifications being prepared by the public works department. There would be an architectural competition for the nautical club in the area that would be organised by the technical chamber Etek, the minister saying he wanted an “emblematic” building for Larnaca. The third project would involve the creation of the area connecting the Finikoudes promenade with the marina.
These seem much more manageable projects which local businesses could also bid for, although Vafeades did not explain anything about the funding. Presumably the cost for the construction of the nautical club and the area linking the marina and Finikoudes would be paid by the taxpayer, whereas the marina project could use the build-operate-transfer method.
Serious thought should be given to the financing of the projects, because the taxpayer should not be burdened with the cost of improving the area so that developers could then build villas for which they would charge premium prices. It is unclear what will happen to the land that Kition planned to develop to pay for the marina and port upgrading, but the government should consider linking the price of the land or the finished villas to the cost of the upgrades. It would be wrong for the taxpayer to pay for the infrastructure that would upgrade the surrounding area and developers to reap the benefits.
The important thing is that the government has gone back to the drawing board after the fiasco and drafted more pragmatic plans that can be implemented within a reasonable period of time and without the contractors getting cold feet about the costs.
