By Anthony O. Miller
COMMERCE Minister Nicos Rolandis is taking up with President Glafcos Clerides today the controversies still stalking the government-owned Nicosia Hilton Hotel: whether to replace its entire board, and whether tax money was overspent by the previous board.
Rolandis had threatened early in December to call a Nicosia Hilton extraordinary general board meeting around January 5 with the aim of replacing the entire board if it continued rejecting the Council of Ministers’ choice for its chairman, Byron Kranidiotis, instead of the chairman it elected, Marios Pelides.
The Council of Ministers must also still resolve whether some £9 million in taxpayer’s money was overspent by the board in its £16-million renovation of the luxury Nicosia Hilton under prior board chairman, Andreas Kaisis, some of whose companies got renovation contracts.
“That has been left in abeyance because of the various problems we had connected with the missiles,” Rolandis said yesterday. “I’m taking this matter up (today) with the president, so that we can proceed with that. We have to resolve this issue.”
“As it was handled by the president, personally – he had two meetings in my presence with the board – I thought it appropriate to wait for the president to be in a position to take it up. I could not start with the Hilton when he was handling the missile problems.”
While “the hotel is running… they have a loss” due to high interest rates and depreciations, Rolandis said, because the renovation investments were made “without the infusion of extra capital.”
A major reason the Nicosia Hilton is losing money for its owner, the Cyprus Tour Development Company (CTDC), is because other Nicosia hotels drew off business during and after the expensive renovation, he said. The government owns 82 per cent of the CTDC’s shares, with the private sector holding the rest.
Where four or five years ago the Hilton’s annual income “used to be approximately £1.5 million, now the income has gone under £1 million because of competition in Nicosia,” Rolandis said.
So, while Hilton International makes money on the hotel, the CTDC is losing around “£700,000 to £800,000” per year on the hotel since the renovations and the loss of business.
While “this has caused a collapse of the price of the hotel” share value, he said, Hilton International has no plans to pull its name from the hotel. To the contrary, it recently renewed its contract to keep its name there through 2020.
The nagging question of the money-losing, government-owned Philoxenia Hotel “will be taken up, as well, one of these days,” Rolandis said, acknowledging it badly “needs refurbishing to the tune of £2 million.”
But he said the Council of Ministers would ultimately have to decide how to deal with the corner, into which the House of Representatives painted both the government and itself by prohibiting the sale of any shares in the limited company it created to oversee that hotel’s operation.
Rolandis has little patience for “this paradox: the government is the owner of this company (but) cannot do what any owner of property can do – sell the property. We are deprived of this right,” he once said.
“This matter has to be taken before the Council of Ministers again,” he said, before the government can even countenance offering any Philoxenia stock, for instance, on the open market.
The Philoxenia’s board, unable to finance needed renovations and tired of watching the threadbare hotel rot for lack of attention, wants the enterprise closed down in March.
