Kition workers rehired by state after Larnaca port takeover

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Workers at Kition Ocean Holdings, operator of the Larnaca marina and port concession that was terminated by the government on Monday, claiming a major breach of contract, will be rehired by the state, securing 70 jobs just ten days before the next mayoral and European elections.

A marathon meeting of trade union leaders with the Ministers of Transport and Labour late on Wednesday concluded that the Larnaca and Famagusta Tourism Development Corporation would take transitionary ownership of the €1.2 bln project and that work would continue uninterrupted, including loading of aid shipments to Gaza.

Earlier in the day, President Christodoulides said prior to a weekly Cabinet meeting that, “we have to move quickly”, noting at the same time that “we had already started preparatory work,” prior to the deadlock over KOH providing financing guarantees.

On Monday, Kition said it was “willing to proceed with the project and tried to solve the disputes with the government in a constructive way,” but that the state weas the one that reneged on the deal.

“At the same time as we were appearing in court to seek the performance of the agreement, the government sent us a notice of termination of the agreement. The notice is in breach of the terms of the agreement, and we are examining our legal options,” the Kition announcement said.

“We are surprised by the disregard for the court process, as would be expected by a state. We applied to the court two months ago to force the government to follow their own agreement and to meet and solve the disputes inline with the agreement. The government’s behaviour undermines the rule of law that should exist to protect investors.”

On Wednesday, as regards the workers who were left in limbo, the terminated operator said, “the government chose not to have a handover period, that would allow for a smooth transition of the operations. Instead, it showed up with police escort but without a real plan or direction especially regarding the employees.”

“This brutal takeover has caused great disturbance among the employees, who are rightly worried about their future.

“Kition has communicated the transfer to the employees explaining the relevant legislation and that their terms and conditions of employment will remain unchanged as they move to the new employer.  Kition has also engaged at its own cost an independent lawyer to advise the employees regarding their rights.”

Talks between the state and Kition, that was awarded the project in 2020, reached a deadlock in mid-April, despite a compromise deal agreed in the presence of President Nikos Christodoulides, allowing the company to provide a letter of guarantee of €4.2 mln, instead of the €10 mln that the state required.

Proceed normally

Prior to Wednesday’s cabinet meeting, Christodoulides declared that “the development of Larnaca port will proceed normally.”

“We are proceeding immediately with what needs to be done, we will go out to tender, we will find a company that can really respond, we owe it to Larnaca, we owe it to the citizens,” he said.

In an effort to defend the project, Kition’s CEO, Panos Alexandrou, told CyBC radio that, despite rumours to the contrary, “the financing capital is there,” stating that he is still waiting to discuss the matter with the government.

“​​It is a shame that we have reached this point.”

Asked by the radio presenter to answer whether, in case Transport Minister Alexis Vafeadis called him, he was ready to present a proposal and at the same time a financing plan, Alexandrou said, “the Minister knows it, they all know it.”

“We have an ambitious project that will change Larnaca, bring great development and make Cyprus even more popular,” he said.

At the same time, the Larnaca business community declared its readiness to assist and participate in the investment to move forward, according to the town’s Chamber of Commerce.

Additionally, the Chamber’s position will be raised by its president Nakis Antoniou during a meeting on Friday with the Minister of Transport, specifying that two separate tenders should be issued for the port and the marina.

Furthermore, the trade union PEO declared that the state, through the Ports Authority, must take over the management of the port and not conduct a new tender to assign it to an investor.

PEO argued that already the project of developing the Larnaca port and marina of Larnaca has been delayed and that there is the risk of the state engaging in new adventures.

Earlier, the Transport Minister noted that he was in contact with the mayor of Larnaca to arrange a meeting with the local community in order to embark on the next phase.

That is a “solution B” which, as he mentioned, “concerns the measures we will take to implement the project in alternative ways”.

He reiterated his commitment that the project will be implemented not under this contract, but under the law through another tender, which will be announced soon if everything goes smoothly and Kition Ocean Holdings does not challenge the matter in court.