By Andrea Sophocleous
CURRENT delays in plans to upgrade Larnaca and Paphos airports will only be exacerbated by the cabinet’s decision to hand over the management of the airports to private investors, the House Watchdog Committee for Public Expenditure heard yesterday.
And deputies warned that the delays and increased costs could all be in vain, as the House of Representatives would contest the cabinet’s bill for part privatisation of the airports.
The Watchdog Committee heard last week that delays in planning for construction at Larnaca airport were adding a million pounds a month to the final price tag, and that recent estimates now set the final cost at ?161 million pounds ? up from an initial 1991 estimate of ?85 million.
Deputies expressed concern at yesterday’s meeting that the cabinet’s partial privatisation plans would aggravate the delays, and asked Communication and Works Minister Leontios Ieodiaconou, who attended the meeting, if their fears were justified.
Ierodiaconou admitted new delays were “possible”; they were, he said, likely to arise while the partial privatisation bill was being prepared and in waiting for the House to approve it ? a process which would take a total of approximately six months.
Delays are also likely to arise while the government sets up a state-run company to handle the selling of shares in the airports.
When committee chairman Christos Pourgourides of Disy insisted that the bill would not be passed so easily by the House, predicting “political battles and clashes” over the issue, the minister was forced to admit the cabinet did not have a back-up plan in the event of a House rejection of the bill.
Deputies calculated that if it took a minimum of six months for the House to debate the bill, on top of the six months it would take for the government to draw up the bill, then this would add another ?12 million pounds to the cost of upgrading the airports.
But the Minister cast doubt on the figure of a million pounds a month lost as a result of delays, saying currency fluctuations made it impossible to quantify the costs. He did not, however, give a figure of his own for the losses.
Diko deputy Nicos Cleanthous, who had initially tabled the issue of the delays, repeated yesterday that the airport problem was one of management and funding, and that the Communication and Works Ministry kept making changes to the plans without considering where the money was going to come from.
He was backed by the chairman when he insisted that the Watchdog Committee be kept constantly informed of developments.
In explaining the cabinet’s plans, Ierodiaconou confirmed that the government would to a large extent continue to own the airports, and that the private investor would merely run them. He pointed out that there was a distinction between ownership and management.
The private investor will sign a five year renewable contract and will not be able to set prices.
Questioned by deputies if the cabinet had considered the possibility of not finding an investor, the minister confidently dismissed such reservations. He said there were companies whose job it was to run airports and it would not be difficult to find one interested in running the island’s two airports.
Ierodiaconou has justified the cabinet’s move to partial privatisation by arguing that handing over management of the airports to the private sector will make them more efficient and competitive.
Disy deputy Prodromos Prodromou gave voice to current speculation, when he asked the minister if the airports’ partial privatisation was part of a wider government privatisation plan.
Ierodiaconou replied that for the moment his ministry was considering the partial privatisation of marinas, but would not address the broader picture.
