Nicosia is doing its best to have a Cyprus-Greece passenger ferry link operational by the summer but the case is tangled up in EU state financing rules, said the Deputy Ministry of Shipping.
Deputy Shipping Minister Natasa Pilides told the Financial Mirror that while Cyprus was never closer to reinstating a ferry link with Greece, the issue is being held up at a European Commission level as the issue involves state financing.
She said the bloc will have to give its approval for the Cyprus government to finance such a venture, after looking closely into the terms of the call for tenders.
The Deputy Ministry has taken on the task to reinstate a ferry link between Cyprus and Greece that was discontinued in 2000 after a sharp drop in the price of airline tickets made the line obsolete.
Despite delays due to the complexity of forming a regulatory framework for the ferry line, as it will be operating partly with state funding, Pilides hopes the first travellers will be sailing for Greece from Limassol this summer.
“While we are waiting for the green light from the European Commission, the Deputy Ministry has prepared all the paperwork to be ready to call for tenders as soon as possible”.
Pilides told the Financial Mirror the matter is a complicated one as the ferry operator will also be using the same boat for shipping purposes as the vessel will not be a passenger ferry but of the Roll-on-Roll-off variety.
“This complicates things a bit, as the European Commission wants to see a clear framework for how the link will work as it will involve a ship which will also be carrying commercial cargo. They want to make sure this will not give way to unfair competition,” said Pilides.
Her Deputy Ministry has sent their answers to a number of questions posed by the European Commission on Monday.
Pilides said that the answer and question process is time-consuming, which does not favour the launching of a ferry service during the summer.
She confirmed that they are expecting to get the green light for the government to finance the line with €5 mln, while optimistic that in the end, Brussels may also chip in.
Nicosia is optimistic, as the feedback it has received from the Commission is that they will give the go-ahead for the state to back the ferry service with Greece.
“Once we get the final go-ahead, then the DMS will call for tenders. The plan is to call for tenders sometime during Easter, and if all goes well then the state will award the contract in the summer,” said Pilides.
The Deputy Minister said the exact date of the launch of the ferry link will be determined by when the contracts are signed.
“If they are not signed in time for the summer season, then the link will be reinstated the following summer, as estimates show the link will not be able to operate during the low season,” said Pilides.
Interested shipowners who are planning to submit a tender for this project should have a ship capable of carrying both passengers and freight.
However, Pilides stressed that the government will only be financing the cost of carrying passengers.
“We assured the European Commission that will ensure that the subsidy is not exploited by the shipowner to subsidize cargo. And this is why we must not circumvent the rules of competition.”
The plan is for a ferry departing Limassol port for a Greek port, possibly that of Piraeus, once a week during the summer months, while in the winter the passenger service to Greece will be every fortnight.
Pilides said there is support from stakeholders in the project in Greece referring to a meeting she had earlier this month with Greece’s Shipping Minister Yiannis Plakiotakis.
She presented Cyprus’ roadmap for reinstating the ferry link to the Greek Minister, who commented that the development of maritime links between the two countries is a mutual pursuit.
Including an intermediary stop at one of the Greek islands is not on the table but it remains to be seen if one of the bidders submits a tender that includes such a stop, said Pilides.
If the ship to be used was a purpose-built passenger ferry, the state would have to raise its sponsorship to something between €12-€15 mln – which is deemed prohibitive.
It was argued that the state would invest €5 mln to keep the cost of tickets at around €130.
Resumption of the ferry service was put back on the political agenda after DISY MPs Nicos Tornaritis and Annita Demetriou raise the issue in parliament in September 2018.
The two MPs aimed to exert pressure on the governments of Cyprus and Greece to revive the sea link, with efforts paying off.
They argue that the link is of the utmost importance as it would create new prospects for trade relations between Cyprus and Greece, as well as promoting Cypriot exports to the rest of Europe.
“This is the first time we have come so close to reinstating the ferry link,” Annita Demetriou told the Financial Mirror.
Demetriou is confident that the ferry service will have no difficulties in drawing in potential operators.
“When we first set out to campaign for reinstating the ferry link, we talked with business circles from both Cyprus and Greece, active in the shipping and cruise industry. The feedback we had received encouraged us to proceed.”
She stressed that reinstating the ferry service is close to becoming a reality as it was backed by all stakeholders, the Deputy Ministries of Tourism and Shipping while enjoying the support of all political parties.