CYPRUS: Multi-million projects jeopardised over planning technicalities

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Multimillion construction projects in Larnaca are being jeopardised as the local development plan has been revoked following a court decision citing technicalities. 


As the Financial Mirror was told by the Larnaca Municipality some 12 projects have been put on ice as the plan has been recalled because the Town Planning board was not in quorum in 2013 when it was discussed.

Larnaca’s local authorities are in despair as the development hampers the long sought after investment in the town and it’s not the only local development plan to be compromised. 

Larnaca Mayor Andreas Vyras said the plan was recalled as a member of the board was absent during the meeting, without sending in a notice.

The Town Planning Department and Town Planning Board will have to reschedule the meeting they had in 2013 to reinstate the plan which sets out regulations for developers, including the building coefficient for each area.

As mayor confirmed building permit procedures for some 12 high-rise projects were put on hold as a result of the cancellation of the town plan.

The plan drawn up by the Town Planning Department and the Town Planning Board was cancelled by an Administrative Court due to technicalities.

The Larnaca Mayor is frustrated over the bureaucracy involved endangering the town’s development.

“We have been waiting and working so hard to catch up with other cities, just to have plans delayed because someone was missing from that meeting”.

He added that investors were laughing in disbelief when he had to inform them that their projects would be delayed because someone did not attend a meeting.

Vyras said the problem with the cancellation, is that the previous town plan is reinstated. In this case, the previous town plan approved in 2006, foresees a lower building coefficient, which would automatically exclude high-rises from obtaining licenses.

He added there was no telling when the new plan will be re-established, as the Paphos plan which was recalled in March this year was only reinstated in September.

“We fear that we may lose investors. These delays add to existing red tape, creating a negative image of Cyprus as an investment destination.”

The freeze has affected a number of real estate projects such as the Larnaca Tower and the QN Kition.

These two projects were approved by the environmental authority and were awaiting the green light from the Town Planning Department and the local authorities to issue the subsequent building permits.

However, due to the cancellation of the local Larnaca town plan the projects have been put on ice.

The Larnaca Tower was given the go-ahead by the environmental authorities in April, while the QN got the green light in July.

The Larnaca Tower is mixed-use complex, reportedly belonging to Russian businessman Nikolai Potapenko, which  will include a 10-storey five-star hotel and a 30-storey tower built in the heart of the Phinikoudes where Hobos café stands.

Kition promoted by the QN Developing Ltd will be a 22-storey, 92-metre-tall building. The project is located at the intersection of Gr. Avxentiou Avenue and Athens Avenue, leading to the coastal front of the Phinikoudes.

It appears Larnaca’s local development plan is not the only one that has been scuppered by technicalities.

Serious delays

Cyprus MPs were informed that a number of local plans have fallen through due to technical discrepancies.

After a meeting of the House Interior Committee, AKEL MP Evanthia Savva said that Athienou’s and Tseri’s local plans as well as a part of Limassol’s local plan have been cancelled.

The Technical Chamber of Cyprus (ETEK) argues that the collapse of local development plans can only harm the construction industry and subsequently to the country’s economy.

ETEK chairman Stelios Achniotis expressed his concern over the continuing cancellations of Development Plans as a consequence of the decisions of the Administrative Court.

These cancellations are then followed by appeals from affected parties with more delays added.

“The cancellation of Local Plans is causing serious delays in licensing developments that have a significant impact on the economy of the country,” Achniotis told the Financial Mirror.

He said ETEK is concerned over the fact that Local Development plans are not being cancelled for substantial reasons related to urban planning regulations, development or environmental protection, but are being cancelled purely over technicalities and procedures.

Achniotis added that ETEK would like to see the introduction of a legal framework which will protect local development plans from being withdrawn over technicalities.  

He said the state should step in and protect the development plans which were drawn up after intensive and academic studies which cost hundreds of manhours.

“It is also crucial to revise the Law on Planning and Planning, based on decades of experience, in the direction of efficient, participatory and transparent urban planning with simple, flexible and seamless development and revision planning processes.”

The Federation of Cyprus Building Constructors Associations (OSEOK) said developers are unhappy with the frequent cancellation of local development plans as they are losing out on big contracts.

OSEOK’s manager Frangos Prokopa told the Financial Mirror that investors, especially from non-EU countries are put off from investing in Cyprus as regulations and requirements are not clear.

“One day they are told one thing, only to be told another the following day.  We cannot tell them one day that according to the development plan you can build so high and the next day, tell them sorry, you can only go this high,” said Prokopa.

Commenting on the two projects in Larnaca affected by the collapse of the local development plan, Prokopa said that investors have already spent hundreds of thousands on environmental and other studies.

“This is no laughing matter. We can not play around with multi-million investments.”

Prokopa argued the state needs to step in and find ways to protect development plans from collapsing over technicalities, as such incidents do not enhance Cyprus’ image as an investment destination.