Government – Hermes relations deteriorate
3/7/2008 0:20
The government’s relations with Hermes, which has undertaken the management of the two Cypriot airports, have deteriorated significantly lately due to the chaos in the airports. The problems that emerged after the undertaking of the ground handling services by Swissport and LGS forced the Minister to threaten the joint venture with fines if the conditions do not change. Meanwhile, the Transport Minister visited the two airports and demanded the activation of the contract provisions for the imposition of fines.
The issue was discussed at a meeting held on Wednesday under the chairmanship of Transport Minister, Nicos Nicolaides. The meeting was also attended by representatives of the Civil Aviation, the Public Works Manager, Alecos Michaelides and Hermes Chairman, Nicos Shacolas.
According to sources, during the meeting the government told Hermes that the Civil Aviation Law gives the right to the Minister to impose an administrative fine to anyone who breaches the law. In that case, the fine will be imposed either to Hermes if it is proved that it violates the law or the other two companies.
Hermes must undertake its responsibilities
Speaking to StockWatch after the meeting, Mr. Nicolaides urged Hermes to undertake its responsibilities with regard to the services in the two airports and warned the two companies that their contract will be terminated if nothing changes.
According to Mr. Nicolaides, despite the Civil Aviation Department’s remarks for specific weaknesses, the passengers’ service continues to be unacceptable.
“The government believes that the ground services at Larnaca Airport primarily and at Paphos Airport secondarily do not fall under the compatible obligations of the companies and the license that they secured, which was granted by the Civil Aviation Department”, he noted.
“We will not hesitate to ask for the cancellation of the license for the ground handling services”, he added.
Hermes undertook the management of the two airports from mid May 2006 for 25 years, while about 1 ½ month ago it assigned the ground services to two companies. From this agreement it is expected to enjoy revenues of €7 billion, €2.3 billion of which will be received by the state.
“We asked from Hermes, as the investor that is responsible for the proper operation of the airports, to take it upon itself”, Mr. Nicolaides said.
“We also had contacts with the two companies and we demanded to improve their services with the proper staff and equipment. Otherwise, we will ask for the lifting of their license”, he clarified.
“Mr. Shacolas committed to submit a memo to the Ministry, which will ensure that all necessary measures have been taken, otherwise he will proceed with the cancellation of the contracts with the two companies”, he stressed.
“If things do not change, we will use the rights provided by the law”, he added.
On the other hand, the company representative said that his company move within the framework of the decisions that have been taken during the Transport Ministry meeting.
Koulias visits airports
Chairman of House Transport Committee and DIKO MP, Zacharias Koulias, who visited the Larnaca airport earlier, was more critical.
According to CNA, Mr. Koulias said that the fine that can be imposed “is of 10% on the revenues”.
“I demand by all, including the strategic investor and the Civil Aviation, to undertake their responsibilities”, Mt. Koulias said.
He stressed that the airports are in chaos and urged the Minister to take all necessary measures so that the services offered to the tourists are dignified.
Mr. Koulias also referred to a phone call that he received by an airport worker two days ago who said that “there were only four workers for eight aircrafts” and supported that there is no know-how and no manpower.
“Paphos Airport faces the same problems too. Despite the difficulties during the previous regime in the airports, they operated properly, effectively and fairly”, he added.
Mr. Koulias said that he does not favour the privatization of all big projects and urged the competent authorities to activate the provisions of the contracts.
The issue was discussed at a meeting held on Wednesday under the chairmanship of Transport Minister, Nicos Nicolaides. The meeting was also attended by representatives of the Civil Aviation, the Public Works Manager, Alecos Michaelides and Hermes Chairman, Nicos Shacolas.
According to sources, during the meeting the government told Hermes that the Civil Aviation Law gives the right to the Minister to impose an administrative fine to anyone who breaches the law. In that case, the fine will be imposed either to Hermes if it is proved that it violates the law or the other two companies.
Hermes must undertake its responsibilities
Speaking to StockWatch after the meeting, Mr. Nicolaides urged Hermes to undertake its responsibilities with regard to the services in the two airports and warned the two companies that their contract will be terminated if nothing changes.
According to Mr. Nicolaides, despite the Civil Aviation Department’s remarks for specific weaknesses, the passengers’ service continues to be unacceptable.
“The government believes that the ground services at Larnaca Airport primarily and at Paphos Airport secondarily do not fall under the compatible obligations of the companies and the license that they secured, which was granted by the Civil Aviation Department”, he noted.
“We will not hesitate to ask for the cancellation of the license for the ground handling services”, he added.
Hermes undertook the management of the two airports from mid May 2006 for 25 years, while about 1 ½ month ago it assigned the ground services to two companies. From this agreement it is expected to enjoy revenues of €7 billion, €2.3 billion of which will be received by the state.
“We asked from Hermes, as the investor that is responsible for the proper operation of the airports, to take it upon itself”, Mr. Nicolaides said.
“We also had contacts with the two companies and we demanded to improve their services with the proper staff and equipment. Otherwise, we will ask for the lifting of their license”, he clarified.
“Mr. Shacolas committed to submit a memo to the Ministry, which will ensure that all necessary measures have been taken, otherwise he will proceed with the cancellation of the contracts with the two companies”, he stressed.
“If things do not change, we will use the rights provided by the law”, he added.
On the other hand, the company representative said that his company move within the framework of the decisions that have been taken during the Transport Ministry meeting.
Koulias visits airports
Chairman of House Transport Committee and DIKO MP, Zacharias Koulias, who visited the Larnaca airport earlier, was more critical.
According to CNA, Mr. Koulias said that the fine that can be imposed “is of 10% on the revenues”.
“I demand by all, including the strategic investor and the Civil Aviation, to undertake their responsibilities”, Mt. Koulias said.
He stressed that the airports are in chaos and urged the Minister to take all necessary measures so that the services offered to the tourists are dignified.
Mr. Koulias also referred to a phone call that he received by an airport worker two days ago who said that “there were only four workers for eight aircrafts” and supported that there is no know-how and no manpower.
“Paphos Airport faces the same problems too. Despite the difficulties during the previous regime in the airports, they operated properly, effectively and fairly”, he added.
Mr. Koulias said that he does not favour the privatization of all big projects and urged the competent authorities to activate the provisions of the contracts.
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