Cyprus improves Greece ferry link subsidy

3 mins read

Cyprus’ Deputy Ministry of Shipping has increased the subsidy for a ferry link with Greece by €500,000 to €5.5 mln, in a bid to make the unwanted tender more attractive for operators.

To reinstate the ferry connection abandoned 21 years ago between Greece and Cyprus, the shipping ministry launched a failed tender in January for a three-year contract with annual state aid of €5 mln.

The subsidy now stands at €5.5 mln, following a cabinet decision on Monday.

Following the cabinet meeting, Deputy Minister of Shipping, Vassilis Demetriades, said: “The Council of Ministers decided to increase the subsidy for the sea passenger connection from €5 mln to €5.5 mln, taking into account the increase in the price of fuel”.

Demetriades briefed the cabinet on the fresh attempt to attract the interest of shipping companies after the initial tender failed to do so earlier in the year.

He said the new tender would be published by the end of November, “aiming to offer citizens an alternative connectivity option”.

In earlier comments to the Financial Mirror, he said Cyprus would be throwing everything they had at a final attempt to revive a ferry connection to Greece in 2022, despite indications of limited interest from operators.

The second tender call was originally expected in October; it was pushed back to November, allowing more time for authorities to carry out pre-tender consultations, minimising the chances of a fresh failure.

Demetriades said there were no guarantees this new attempt would be successful, as industry stakeholders in Greece and Cyprus appear to be reluctant.

“However, the project is far from being dead in the water, and authorities are doing all they can to reinstate the ferry link with Greece.

“We have been in consultations with the industry, and we have prepared, what we feel is, an attractive deal.”

The previous attempt had failed because most Greek and Cypriot companies did not feel comfortable removing a ship from a profitable Greek island route to cater to the Cyprus ferry link.

“We never said that reinstating the ferry link would be an easy task, especially after being out of action for 21 years.

“Although the state will cover costs, there is currently no way of knowing how profitable such a link would be.”

Demetriades said that persuading shipping operators is a tough nut to crack, but authorities were hoping to turn the heads of traditional shipping companies in the EU and Scandinavia.

“The tender is not only addressed to the Greek and Cyprus maritime industry, but it is a call to all European maritime companies.”

The tender will also allow the ferry link to stop at a neighbouring country, such as Egypt or Israel.

“This means the route could be extended to include a port in Israel or a Greek island, making the package all the more attractive.”