The government claims to seek the best possible deal for the development of Larnaca Port. However, a clause in the previously agreed terms for the operation of both Larnaca and Limassol Ports (established during the tenure of Minister Marios Demetriades) might impact new investments.

Specifically, Larnaca Port has been subject to a long-standing cap on its commercial operations, which, according to the agreement, must be limited to 900,000 tons. If this limit is exceeded, the state is obligated to compensate the managing company of Limassol Port, DP World, which argues that increased operations at Larnaca Port would reduce its own business volume, leading to a loss of revenue.

Moreover, the Republic of Cyprus has already paid approximately €6.4 million in compensation to the managing company of Limassol Port following a ruling against the Republic by the International Arbitration Court. This legal action was initiated by both the Republic and DP World Limassol Ltd concerning their contractual agreement.

It is worth noting that despite the compensation paid by the Republic, the overall agreement has not necessarily been detrimental to the state. Since the management of Limassol Port was handed over to the private company, revenues for the Republic of Cyprus have doubled. However, the current situation may negatively influence the perception of potential investors regarding the management and development of Larnaca Port.

Transport Minister Alexis Vafeades, when questioned by Brief, stated that the Ministry, following instructions from the President of the Republic of Cyprus, is taking steps to find a solution before any investment agreement is signed. He emphasized that the existence of the cap reduces the port's value.

According to Mr. Vafeades, the government will consider various scenarios and conduct a cost-benefit analysis of each option to find the best possible solution.

The Minister also noted that while no meetings with interested investors have taken place yet, when they do occur, investors will be informed about this particular issue.

When asked about the potential solutions being considered by the government, the Transport Minister outlined three main scenarios.

The first scenario is to have the cap agreement declared illegal. Mr. Vafeades added that a request is already being prepared to be submitted to the European Commission or even to the Competition Commissioner in this regard.

If the agreement is not deemed illegal, the government may attempt to negotiate a new agreement with the managing company of Limassol Port (DP World) to remove or modify the cap at Larnaca Port.

However, if such an agreement cannot be reached, the option remains for Larnaca Port to continue handling more than 900,000 tons of goods, in which case compensation payments to the managing company of Limassol Port would continue.