ECONOMY

Deal on Cyprus airport management is close, says government official

NICOSIA (AFP) – French-led consortium Hermes Airports is close to sealing an estimated 450-million-dollar deal with the Cyprus government to build and operate Larnaca and Paphos airports, an official told AFP yesterday. «We are close to a deal but there is no agreement yet. There is still work to be done,» Communications Ministry official Alecos Michaelides told AFP. «Up until today, we are progressing very well and we expect developments in the coming weeks. I can’t say any more than that,» he added. The Build-Operate-Transfer (BOT) project is the first of its kind on this holiday island. The new Larnaca airport has been earmarked to open in 2007 and Paphos in 2006 under a 25-year lease. Hermes stepped into the negotiating process last July after preferred bidder British-led Alterra Consortium pulled out over spiraling costs and feared competition from a refurbished Tymbou airport in the Turkish-held north of the divided island. Alterra was announced as the preferred bidder in November 2003 for the project but nothing has gone smoothly since then, allowing second preferred bidder Hermes a shot. The consortium includes: Ireland’s Aer Rianta International, French companies Bouygues Batiment, Egis Projects and the Nice Cote D’Azur chamber of industry, Vancouver’s YVR Airport Services, and local firms. The Bouygues Batiment group declined to comment yesterday on the latest report, but a banking source confirmed the negotiations were advancing. Minimum annual rental fee for both airports is 7.8 million dollars and in addition, Alterra offered 48.9 percent of its gross revenue to the government in royalties, while Hermes has offered 33 percent. Evaluation of the bids was based on the upgraded airports being able to handle total passenger traffic of 10 million in 2007, rising to 15 million from 2015.