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- Ελληνικά
Recent statements by the Mayor of Paphos published in the daily press, as well as an announcement by the Audit Office of the Republic dated 10 October 2023, in relation to the Phase 2 development of Larnaca and Paphos Airports, present facts in a fragmentary, incorrect and misleading manner, thus distorting reality and creating negative impressions. For this reason, the Ministry of Finance is obliged to repeat the relevant facts in an objective manner for the proper information of the public.
The Mayor of Paphos is reported to have stated that the reason why the additional construction works at Larnaca and Paphos Airports did not proceed is a previous "agreement" between the Ministry of Finance and the managing company for a time extension of the concession contract and satisfaction of the company's claims.
The Mayor of Paphos is reported to have stated that the reason why the additional construction works at Larnaca and Paphos Airports did not proceed is a previous "agreement" between the Ministry of Finance and the managing company for a time extension of the concession contract and satisfaction of the company's claims.
The Ministry of Finance duly states that no "agreement" has been reached between the managing company and the Ministry of Finance for a time extension of the concession contract and satisfaction of the company's claims.
The Concession Agreement includes milestones for the start of construction of Phase 2. The milestone relating to exceeding the capacity of Larnaca Airport was met in 2016. In accordance with the provisions of the Concession Agreement, the milestone for the start of construction of Phase 2 was also automatically triggered for Pafos Airport. The managing company has resorted to an expedited dispute resolution procedure with a request to proceed with improvement works at the airports and to postpone indefinitely the construction of Phase 2. The panel of judges rejected the company's request. However, that judgment, which was issued in 2021, does not oblige the company to construct the Phase 2 works. For this reason, the Republic of Cyprus has initiated arbitration proceedings against the managing company in order to oblige it either to carry out the relevant Phase 2 construction works or to compensate the Republic of Cyprus accordingly.
The management company has advised that it is unable to secure bank financing for the execution of the Phase 2 construction works. As part of the discussions between the two parties held during 2022, options were explored that could facilitate the company in obtaining bank financing for Phase 2 while, in a holistic approach, leading to a resolution of the chronic outstanding issues (which still exist today) involving claims of the managing company against the Republic, which would be waived. Representatives of the Ministry of Finance, the Ministry of Transport, Communications and Works and the Legal Service of the Republic were involved in the relevant discussions with the management company.
In view of the above, it is obvious that the delay in the realisation of the additional investments in Larnaca and Paphos Airports is not due to the so-called 'agreement' since no agreement has been reached between the Ministry of Finance and the managing company regarding the extension of the contract and the simultaneous waiver of the claims of the managing company.
In any event, the extension of the Pafos Airport premises, which is the purpose of the statements of the Mayor of Pafos and the announcement of the Audit Office was not included in the Concession Contract.
However, during the discussions held in 2022 between the Ministries of Finance / Transport, Communications and Works and the managing company, it was discussed that the extension of the Pafos Airport terminal building be included in the additional investments of Phase 2 with the simultaneous removal of other works provided for in the Concession Contract, as part of the agreement to be concluded if and when the conditions under which the whole negotiation process was taking place were met.
(OP/EXP)
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