Alexis Vafeades: “We are activating Plan B, a new investor for the marina and the port of Larnaca will be found” (Updated)

The Government is proceeding directly with the activation of Plan B regarding the unified development of the marina and the port of Larnaca following the termination of the contract with Kition Ocean Holdings.

For this purpose, a meeting will be held on Friday, 31 May, Minister of Transport and Works, Alexis Vafeades has announced, "It (the meeting) concerns the measures we will take to immediately start implementing the project in alternative ways. From the moment this contract had to be terminated, we have committed that the project will proceed and we are activating this intention with the first meeting this Friday."

"Our commitment is that the project will be implemented, unfortunately it cannot be implemented with this contract, but other ways will be found to move forward," he assured journalists at a press conference.

Kition Ocean Holdings later on 27 May issued a statement expressing surprise at the government's decision and said it was looking at its legal options. The full statement can be seen at the end of this article.

Returning to the government's press conference, as Vafeades explained, based on legislation and specifically on the law on contracts, a new contractor can only be selected through a new invitation to tender process.

According to the responsible minister, Kition Ocean Holdings has not yet informed the Government whether it intends to appeal the termination of the contact in the courts.

"We had set a meeting for today (27 May) at noon to discuss the smooth transition of the operation of the port to the state, Kition decided not to participate in this meeting, but the matter will be handled differently," he elaborated.

Asked to explain what he meant by handled differently, Alexis Vafeades underlined that there is investment interest in Cyprus.

"We encounter this all the time, either from states or from large companies that contact the Government and ask to see if there are projects in which they can invest. Therefore, we are not troubled by whether or not there are available amounts and funds abroad, we believe that an investor will be found. Therefore, we expect that they will also participate in the invitation to tender process," the Minister underlined.

Asked to comment on how the government will act in the case of Kition taking legal action, Vafeades was clear. "We will also take legal action," he declared.

Alexis Vafeades indicated that in relation to the guarantee that was not liquidated, the state's right to this money has not been lost and that it will be part of the compensation that will be requested.

"It was an essential term of the contract and it will be decided in court. But we believe that we are entitled to this money and we will claim it. I have to tell you that on Friday we activated another condition of the contract which says that before the termination you are entitled to claim the other guarantee and we have done so. We have activated this condition and as you know the third guarantee is the subject of a court proceeding, which is ongoing," he said.

He expressed the position that when a contract does not develop as expected, this means that something has gone wrong.

"We have a duty of care to assess what's going wrong, to fix if something needs to be fixed, so that in the next process we don't face the same problems. Therefore, this self-criticism is a duty must be done and will be done," he emphasised.

Also read: Government terminates €1.2 billion Larnaca marina and port contract with Kition

Kition Ocean Holdings later on 27 May issued the following announcement:

"Today the Government took the decision to terminate the concession agreement for the Larnaka marina and port. Earlier this morning, at the same time we were appearing in court to seek the performance of the agreement, the Government sent us a notice of termination of the agreement. We have been advised by our legal team, that the notice is in breach of the terms of the agreement, and we are examining our legal options.

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.

Kition Ocean Holdings (Kition) has always acted in accordance with the agreement and the law and was always willing to proceed with the project and tried to solve the disputes with the government in a constructive way."

(Source: InBusinessNews)