Cyprus Terminates Larnaca Port Concession Over Development Dispute

 

The Government of Cyprus in an ongoing dispute with the long-time leaseholder at the port of Larnaca announced it has terminated the concession and assumed direct management of the port. They immediately issued a statement reassuring that port operations would continue, including the use of the port as the staging area for the relief aid being shipped to the U.S.’s temporary pier in Gaza.

There are big development plans to expand the port and turn it into a major industrial and recreational facility. Larnaca was created in the early 1970s from a historic open anchorage and started commercial operations in 1973. Today, it is the second commercial port behind Lemesos and several smaller marinas and recreational ports on the island. 

Larnaca is a multi-use port that occupies an area of approximately 110 acres on the southern coast. It serves all kinds of cargo from bulk, (feed, grain, plaster) to conventional cargoes such as timber, iron, fertilizers, cars, pipes, as well as petroleum. It also has become a port for cruise ships and ferries.

Kition Ocean Holdings was the long-term lease holder of the port but it had been involved in a legal dispute with the government. The government accused the company of failing to renew a letter of guarantee for the planned reconstruction of the port while the company had been in court for the past few months to force the government to move forward on the agreement. They responded to the news that operations transferred to the Cyprus Port Authority as of midnight May 27 accusing the government of a breach of contract.

 

Redevelopment plan calls for expansion of the commercial port and a new marina (Port of Larnaca)

 

The government and Kition in 2022 agreed on a port redevelopment and marina project for Larnaca valued at approximately $1.2 billion. The plan called for the second largest port in Cyprus to be expanded with 10 piers, a state-of-the-art passenger building, and new environmentally friendly equipment. At the same time, the existing infrastructure of the port was to be upgraded including the piers, internal road network, and storage areas. 

The President of Cyprus Nikos Christodoulides said today that the expansion project would continue without delay while saying they would also be looking for a capable company to handle the development and operations. He confirmed that there have been discussions with the Emir of Qatar about strategic investments in Cyprus, including possibly the port. He also mentioned his recent meeting with the Chinese ambassador.

The Cyprus Port Authority is now overseeing gate operations, the port perimeter, and ship management. Government officials stressed that operations would continue as normal.