Contracts signed for €1.2 bln Larnaca Port & Marina development

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Long-awaited €1.2 bln redevelopment of Larnaca port and marina jumped the final hurdle on Friday as the Cyprus government signed contracts with Cypriot-Israeli investors.

At the signing ceremony, President Nicos Anastasiades expressed the government’s satisfaction, as the “development of Larnaca port and marina will fetch additional revenue of €120 mln per year”.

“Today is a special and highly important day for all Larnaca residents as a justified demand dating almost three decades …has entered the pipeline,” the president said.

The consortium awarded the project is Kition Ocean Holdings, a Cypriot-Israeli consortium, composing of investors Eldeman Holding BV and Alexandrou Corporate Services Ltd.

Tender negotiations between the two sides have been ongoing since late 2018 when the consortium’s bid was the only one left on the table after the other bidders pulled out.

Anastasiades said it was one of the biggest investments in the past seven years and it yet another reflection of Cyprus’ excellent relationship with Israel.

“The implementation of projects like the unified development of the port and Larnaca marina and the potential of fully utilising its development zone is undoubtedly recognised as landmark projects and a driving force for the economy.”

On behalf of the Israeli investors, the executive director of the Jordache Group, Avi Hormaro, said: “We are ready to immediately proceed with the working groups to ensure we will deliver the project on time”.

There will be a transition period until January 2022, and work will be carried out in four phases over 15 years.

On behalf of Kition Ocean Holdings Panayiotis Alexandrou, the executive director, said the consortium is committed to creating a functional port and the creation of an ultra-modern marina in the eastern Mediterranean while respecting the environment and the area’s character.

Alexandrou said the project will create over 4,000 jobs and opportunities for Cypriot and foreign entrepreneurs.

Transport Minister Yiannis Karousos welcomed the investment after signing contracts.

“Development of the port and marina area of Larnaca has been promoted for years, now the time has finally come for its implementation”.

Following the issuance of the required permits, work is expected to begin in two years, including port expansion with infrastructure for cruise ships and commercial use.

The contract involves the restructuring of the marina for at least 650 berths, the port and surrounding land development over an area of 220,000 sqm spanning to a total of 510,000 sqm.

Plans include the development of the marina with the latest technological infrastructure, turning Larnaca port it into one capable of serving large vessels with the expansion of piers, docks, and the construction of a modern passenger terminal.

As part of the marina development, there will be a yacht club with a retail park, plus hotels, a private island and residential properties.

Port works will also include the expansion and management of Larnaca port, improving current infrastructure such as the interior road network, storage space as well as creating a new terminal for cruise ships and utilising the port for cargo management.

The area between the marina and the port will see infrastructure works carried out, including a road network, green areas, parks, open spaces for events, as well as an educational and medical centre.

The consortium is also planning residential and commercial development with innovative architecture, streets, and parks.

Under the proposed venture, it is estimated that the state will receive more than €19.6 bln during the lifetime of the project which includes the 125-year lease on the real estate.

The BOT project will see the government receiving fixed rent and a percentage of the revenue through a concession agreement with the port/marina operated on a 40-year lease and the real estate is acquired on a 125-year lease.

After 40 years, the port and marina can be handed back to the government who will then decide on their management.

The complete project will span over 15 years or more as it includes building two hotels (lifestyle/business), nine office buildings (mixed-use) of up to 15 floors each and six luxury apartment blocks up to 13 floors each.