THE government team negotiating with the preferred bidder for the building and operation of the island’s new airport at Larnaca and the upgrading of Paphos airport handed over its conclusions to the Communications and Works Minister yesterday.
“We gave our positions on all the points,” said negotiating committee leader Lazaros Savvides. “The Minister is informed by the committee and he will decide as to the presentation of the subject to the Council of Ministers,” said Savvides.
He denied that yesterday’s report meant the end of the line for negotiations with preferred bidder Alterra Consoritum. The negotiations procedure, which began in January for the £200 million Build-Operate-Transfer (BOT) contract, and should have been finished by April, has been dogged by speculation that all is not well.
“Our report does not necessarily mean bad news for the consortium,” said Savvides.
The project is already almost a year behind schedule and construction is nowhere near starting until the government manages to reach a deal with Alterra or move on to the second preferred bidder Hermes Consortium.
There are fears that the airports could be facing chaos for the summer, with reports that the government, which it waiting to sign with a new operator, has stopped upgrading the airport in order to save on costs.
Under the terms of the Build-Operate-Transfer (BOT) contract, whoever is awarded the contract will take over the operation of the island’s existing airports immediately while constructing the new one at Larnaca.
Both sides in the negotiations have consistently denied that the talks have run into trouble.
“We hope that by the end of this week we will be able to forward our reply to the consortium,” said Savvides.
Alterra, a consortium with British interests, was named as the preferred bidder for the 25-year BOT contract last November. Its bid included an offer to return to the Cyprus government 48.96 per cent annual gross turnover in royalties under contract, compared to 33 per cent offered by the Hermes Consortium and 20.21 per cent promised by the Cyprus Airports Group, which, in addition to Cypriot company J&P, with a 60 per cent stake, includes British airport authority BAA with a 15 per cent interest.
