The Government had no choice but to terminate its contract with Kition Ocean Holdings Ltd, Cyprus’ Minister of Transport, Communications and Works, Alexis Vafeades said on Tuesday. The company was tasked with the redevelopment and operation of the Larnaca Port and Marina area.

Replying to journalists’ questions on the sidelines of an event in Nicosia, about the decision of the Government to terminate its contract with the company, and, whether other investors expressed interest in the project Vafeades said that, the Government acted based on advice by the Law Office, adding that the Government follows the procedure provided in the contract “to the letter” and that their actions were legal.

The Minister noted that, if the company had a different view, “I expect it will document it at some stage”.

Vafeades also referred to “a huge effort by the Government” in the past four months, to find ways to not terminate the contract with the said company. He said that the company’s CEO had repeatedly stated since January that he was willing to buy out the other shareholders and submit the appropriate applications in order to change the company’s share capital and that the Government’s response had been that, assuming that this would have been approved by the competent authorities, it was ready to cooperate with a new composition, in order not to lose the contract. “Unfortunately,” he said, the CEO did not present any official document to the Ministry or any other body that would make his intention official. 

In the absence of any formal application, he added, the Government had to assess whether it could legally continue to be in a contract without the existence of a letter of guarantee and let this continue indefinitely. The Minister said that the Government had given a lot of time to the company and its CEO, “but they have ignored us”.

He added that President of the Republic himself held a meeting with the company, in which the company made a commitment to submit a letter of guarantee, but that this was not implemented. “This cannot continue indefinitely, because it does not ensure the public interest”, he added. 

Vafeades said that they took everything into account, including the CEO’s intentions, which were not implemented, he noted, “despite the many opportunities we gave them”. “Therefore, we had no choice but to terminate the contract”, he said.

Responding to another question about the possibility of a probe, Vafeades said that, when a contract does not turn out in the way it was expected, it was necessary to assess everything that has happened with the primary goal of identifying any mistakes and prevent such issues again.