Companies hold back Limassol port tariff hike

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After crisis talks with the Transport Ministry, one of the three concessionaires at Limassol port announced they would slash a planned increase on tariffs by two thirds, while a second postponed any hikes.

P&O Maritime Cyprus, handling cargo at the Limassol port, said it intended to increase tariffs for their services by 6.62% on February 1 instead of 16.6% as initially announced.

Eurogate Container Terminal Limassol Ltd said it plans to delay any increase on tariffs until February 28 to give time to the government to resolve the issue.

The development came after a Transport Ministry intervention, following a backlash from the business leaders and political parties.

Meanwhile, the government plans to absorb the hefty 16% hike in tariffs announced by the three concessionaires at Limassol port could be perceived as state aid.

The Audit Office warned that any state waiver to offset the rise in port fees in Limassol would require Brussels’ approval.

“To amend the Limassol port contracts, a formal request needs to be brought before the Central Committee on Changes and Claims, but only after the state secures the approval from the EU,” the Audit Office said on Twitter.

“In any case, the condition is to secure EU approval as state aid.”

The Transport Ministry has been looking into ways to soften the tariff increase, with the business community saying it will cause irreparable damage to the economy, especially exports.

The Chamber of Commerce wants the state to forego its 62% share of the fees to make the cost burden on traders less painful.

Ruling DISY’s leader, MP Averof Neophytou, also proposed the government waive its right on earnings from any increases on tariffs.

Transport Minister Yiannis Karousos discussed this proposal with DISY’s leader.

Karousos said the future increases are estimated to be slashed to a third.

He voiced his dissatisfaction with the port management companies.

“It’s not the right time to impose increases amid coronavirus. We will do what we can to ensure that increase will affect the end consumer as little as possible”.

Karousos said the privatisation deal with the three concessionaires at Limassol port has seen state revenues in the last five years reach approximately €250 mln.

In the five years before the port’s privatisation, the state had around €89 mln revenues.