The entire maritime and business community of Cyprus has applauded parliament’s unanimous vote on Friday to pass legislation establishing the Deputy Ministry (Under Secretariat) for Shipping, one of three non-voting Cabinet offices this government pledged it would create over four years ago.
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Just two weeks ago, on June 26, MPs decided at the House Finance Committee to forward for a vote to the House plenary the legislation that will define three new branches of the executive – shipping, tourism and development.
The three State Secretariats will operate independently of the ten-member Cabinet and will report directly to the President.
Transport Minister Marios Demetriades was quick to praise the unanimous vote in parliament, saying that “shipping is undoubtedly a vast chapter for Cyprus. It is our duty to safeguard Cyprus shipping so that it employs all the means available to it in order to overcome challenges in the international maritime sector, while maintaining our competitiveness. In this direction, the upgrade and enhancement of the maritime administration will be of great help.”
Demetriades explained that the new Deputy Ministry will have the authority to handle all matters related to shipping.
“The ultimate aim is to achieve flexibility and speed in decision making, improving and upgrading state services, promotion of the Cyprus Flag, and strengthening co-operation with all parties involved, by becoming a modern and world leader in maritime services.”
The Transport Minister, who will lose the Department of Merchant Shipping from under his control, but which will be transformed into the new Deputy Ministry, said that the change “will also enhance a significant contributor to the economy … as shipping accounts for about 7% of GDP.”
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In earlier statements to the Financial Mirror, Demetriades had said that the aim was to boost this share of the maritime cluster to 8.5% of GDP.
The Cyprus Chamber of Shipping, the umbrella organisation for the maritime cluster of shipowners, managers and services labelled the House decision for the Deputy Ministry of Shipping as “full speed ahead for Cyprus shipping and the economy”.
“Such unified state and public support is also expected to serve as convincing leverage to attract additional quality shipowners and shipping companies to Cyprus, with a positive chain effect on reducing unemployment and strengthening other economic sectors that provide services to the shipping industry.”
The shipping community ranks Cyprus as the third biggest flag in the EU, behind Greece and Malta, and eleventh worldwide, while ship management by Cyprus-based companies is among the handful of global leaders.
Hailing the parliamentary decision as a new page of “shipping history for Cyprus,” the Chamber said that “this new structure of the Cyprus Maritime Administration will be fully implemented with the commencement of the new government in March 2018. The Shipping Chamber will now focus its attention, utilising the interim months, to work closely with the Ministry of Transport and the Department of Merchant Shipping, in preparing all the necessary operating prerequisites, so that the new Deputy Ministry will be able to operate fully from the first day of application of this new promising institution.”
Last month, the Chamber said the decision established an “innovative institutional structure” and will substantially contribute to the further development of Cyprus shipping and the economy, in general.
Meanwhile, the Employers and Industrialists Federation (OEV), the largest business group on the island, issued an announcement saying it was “particularly satisfied with the unanimous House decision.”
“The creation of the Deputy Ministry will enhance the dynamic of a very significant branch of the economy and will multiply its contribution to the development of the country,” OEV said, calling on the House to speed up procedures and pass the legislation for the other two offices.
Cyprus has a very strong ship-management sector, offers services to almost 5% of the world’s fleet and has around 22-25% of independent third party ship-management, Minister Demetriades told the “Shipping Forecast Summit 2017” held in Limassol in February, organised by the Bank of Cyprus.
“During the past couple of years we have been attracting more companies in Cyprus and actually our effort is to attract shipowners,” the Minister said, adding that the more shipowners you have the more other activities you attract.
Moreover, “the Turkish embargo affects the growth of our fleet and this is something everyone recognises,” he said, adding that this is one of the reasons that “if we have a solution to the Cyprus problem and lifting of the embargo, this will help our registry a lot.”
The Minister noted that the new shipping strategy, aiming to further enhance and develop the maritime sector, is based on five pillars, the development and implementation of a national shipping promotion strategy, the cooperation enhancement within the Cyprus maritime cluster, the establishment of shipping incentive schemes, the fine tuning of the shop registry pricing policy, and the development of the one-stop shipping shop.
One of the new things the ministry did, he explained, was to hire a private company in London to promote Cyprus shipping. He said that this was important “because we needed the input of the private sector and we can get more input from the private sector in promoting shipping.”
Demetriades expressed satisfaction with the fact that banks are getting into shipping finance end expressed hope that this will be successful “as this is a risky sector, but it can be also beneficial as well.” In addition to Bank of Cyprus, Hellenic Bank also has a shipping unit.
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On his part, Bank of Cyprus CEO John Hourican said that “Cyprus is a major flag carrier and is the number one shipping management centre in the European Union” and that shipping represents about 4% of Cyprus’ GDP and near 8% of the economy.
“It is a very important part of this economy and has real potentials, despite the challenges facing it. Greek and Cypriot ship-owners account for about 17% of the world tonnage and Cyprus is a great place to domicile much of this fleet and build long-term businesses of substance,” Hourican underlined.
“We aim to become, hopefully by choice, a trusted banking partner for a select and progressive group of ship-owners and services. We will build our capability very carefully and we will endeavour not to disappoint you along the way,” Hourican concluded.
