Larnaca Marina Development, Halted as Contractor Fails to Submit Guarantee

The much-anticipated Larnaca Port and Marina project in Cyprus has hit a snag as the contractor, Kition Ocean Holdings, has failed to submit the required guarantee despite an extended deadline. Minister of Transport, Communications, and Works Alexis Vafeades confirmed in an emergency session of the Parliamentary Committee on Transport that the contractor has not fulfilled this obligation, which was committed to during an April 15, 2024 meeting at the Presidential Palace.

Vafeades emphasized that while the project will proceed, it must be done legally. The Legal Service has been informed about the issue and will provide guidance on the next steps. If the contract with Kition is terminated, the government plans to initially take over management of the port through subcontractors before appointing its own contractors.

The dispute arose when Kition refused to renew one of the three letters of guarantee and submitted requests to vary the terms of the contract. Kition claims it has secured the necessary capital, assembled a competent team, and established the required processes, but faces challenges as the Ministry has not agreed to meet with them to discuss the guarantee amount for the Operations & Maintenance guarantee.

Why this matters: The Larnaca marina development is a transformational project for the city and Cyprus as a whole. Its delay could have significant economic and tourism implications, making its timely resolution critical for all involved parties.

Larnaca Mayor Andreas Vyras and Nakis Antoniou, President of the Larnaca Chamber of Commerce and Industry, both emphasized the desire for the project to continue legally, noting the high investor interest. "The city is not involved in the bidding or investor selection process but wants the project to proceed without further delays, as long as it is within the bounds of legality," Vyras stated. As the government and Kition Ocean Holdings work to resolve the impasse, the future of this landmark development hangs in the balance.

Key Takeaways

• Larnaca Port project delayed as contractor fails to submit required guarantee.
• Government to take over port management if contract with Kition is terminated.
• Kition claims it has secured capital but disputes guarantee amount with ministry.
• Project delay could have significant economic and tourism implications for Cyprus.
• Larnaca officials want project to proceed legally, despite the impasse.