CYPRUS AND Qatar yesterday signed a multi-million euro deal to develop a hotel, residential and commercial complex in central Nicosia, aiming at attracting overseas business to Cyprus.
The deal for the ambitious project was among two agreements and four memoranda of understanding signed between the two sides. Qatar’s leader, Emir Sheikh Hamad bin Khalifa al-Thani, presided over the signing.
State-owned Qatari Diar Real Estate Investment Company and the Cypriot government agreed to set up a joint venture for the development of a five-star hotel, commercial centre as well as offices and apartments on a site close to Hilton hotel in Nicosia.
Qatari Diar CEO Mohmmed bin Ali Hedfa, told reporters that the project will be completed in two phases, costing a total of around $150 million (€112 million).
The first phase, which will include the hotel, will be completed 30 months after the day it starts, expected to be around the time the joint-venture is established.
“The hotel will have at least 220 rooms,” Al Hedfa said.
Asked why Qatar chose Cyprus to invest, Al Hedfa said the island was not so hard hit by the global economic crisis.
“We believe in the economy of Cyprus,” he said.
Each side will hold a 50 per cent stake in the joint venture, with Cyprus contributing the land, which now houses an army camp, and Qatar paying in cash the equivalent of the property’s value.
Finance Minister Charilaos Stavrakis said the total cost will probably exceed the value of the land.
In such a case, a provision has been made for the venture to borrow money without Cyprus providing a guarantee.
“We are talking about a joint venture and a 50:50 co-operation with the state of Qatar, which at the moment is the biggest investment power in the world, that apart from the huge political benefits can yield many more other significant advantages,” Stavrakis said.
The minister stressed that the project will create hundreds of jobs both during construction and when it becomes operational.
The state can also look forward to making money from land transfer fees, VAT and through taxes from the operation of the hotel.
Stavrakis said the apartments and office space will be promoted in Qatar and the rest of the Middle East in a bid to sell as many as possible to businesspeople of the Arab world.
The minister said the deal for the biggest direct investment ever in Cyprus was achieved after two years of “persistent, co-ordinated and low key efforts.”
It was almost scuppered last year when the opposition kicked-up a huge fuss over the government’s decision to negotiate directly with Qatar and not open a public competition.
The agreements were signed at the presidential palace in the presence of President Demetris Christofias and the ruler of Qatar, Emir Sheikh Hamad bin Khalifa al-Thani who arrived on the island with a large delegation yesterday morning and departed early in the afternoon. With a net worth of around $2.0 billion, the Emir is said to be the world’s eighth wealthiest royal.
“This fact shows the high level of our relations and the rapid development of the co-operation between our countries, sealing our desire for further strengthening the friendship and solidarity between our people,” Christofias said.
