June 24 - 30, 2015
2 | OPINION | financialmirror.com
FinancialMirror
Limassol port model is the way
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The release of the tender last week for the management of the three concessions at Limassol Port seems to have produced the ideal model with a perfect balance between the need for privatisation and de-nationalisation on the one hand, and on the other, satisfying union demands for the eternal continuity of “jobs for the boys” in public service – a political win-win for the incumbent administration. The fact that as many as 70 potential investors have shown interest to submit a bid for one or all three of the concessions – container terminal, passenger terminal and marine services – goes to show that the port, that handles 80% of cruise passenger traffic and 70% of all trade, has great potential, despite its rigid management and archaic work rules. What the government has achieved, with little resistance from opposition parties, is that the current owner-operator Cyprus Ports Authority will become a landlord and regulator, hence, its staff numbers will eventually decrease or, on the upside that private management boosts business, the workforce will remain in place, as their responsibilities will double, in the least. This is what should happen with the other major utilities that will be “denationalised”, for
fear of using the “privatise” term just eleven months from the next parliamentary elections, as part of the economic adjustment programme imposed by the Troika of international lenders and the 10 bln euro bailout plan. So, as suggested by (then opposition) DISY leader Averof Neophytou a decade ago, Cyta should be split into two – the state network owner and the commercial operator – similar to electricity provider EAC – the grid owner and the commercial operator. Already, in the case of the EAC, the noisy unions are preparing to trouble consumers again by planning strikes because the strategy here is to transfer all assets (the grid) to the energy regulator, which makes great sense, just as Britain did when it split BritRail by holding on to the rail lines and maintenance, while privatising all passenger services. With Finance Minister Haris Georghiades doing a superb job of bringing the economy back on track, he should now do the smart thing and reallocate the surplus from the bailout fund to invest in infrastructure to improve the electricity and telecommunications grids, making it easier to find investors for both commercial services and thus improving connectivity, lowering costs for the private sector and truly supporting innovation and competitiveness.
THE FINANCIAL MIRROR THIS WEEK 10 YEARS AGO EU solidarity? UL blocks Aspis The EU leaders summit is expected to decide on ‘solidarity’ or ‘suicide’ when deciding on the nextterm budget, with Britain rejecting compromise and Italy expected to torpedo the proposal, while in other news, Universal Life’s chief has blocked a takeover deal by Asbis, according to the Financial Mirror issue 624, on June 15, 2005. EU summit: EU leaders formally start what will be the most important European Council summit in recent years, whether it will be a ‘solidarity summit’ of
20 YEARS AGO Offshores ‘here to stay’, money launder charges A senior Central Bank official said that the offshore concept was ‘here to stay’, while the government went on the offensive to counter charges of money laundering, according to the Cyprus Financial Mirror issue 115, on June 14, 1995. Offshore concept: Senior Central Bank Manager Iakovos Pashos said that the offshore concept will remain and Cyprus is determined to defend the tax advantages offered to these companies. He said that British consultants JF Chown & Co had drafted a
the optimists or the ‘suicidal summit’ of the pessimists, depending on attitudes over the budget for 2007-13, given the crisis after the rejection of the new EU constitution by France and Luxembourg. Britain rejects: PM Tony Blair rejected as ‘unacceptable’ new proposals by the EU Luxembourg presidency to resolve a damaging budget dispute, fighting to maintain the widely detested ‘rebate’ which other EU leaders
want to freeze, with Britain losing 25-30 bln euros. UL blocks Aspis: Universal Life CEO Andreas Georghiou blocked the second largest takeover deal of the year of CYP 16.5 mln by exercising his right to first offer for the 28% stake in the insurer that Bank of Cyprus wanted to sell to Aspis Pronia. Laiki held a 35% stake. The biggest deal of the year was 100% of Chris Cash & Carry by Carrefour Marinopoulos for CYP 21.6 mln. EMED on AIM: Eastern Mediterranean Resources, the Australian-owned company prospecting for copper in Cyprus, east and central Europe and Asia, listed on the LSE AIM market raising GBP 2.25 mln from its IPO.
study to see how Cyprus could maintain these advantages, and even expand them, in the case of a possible EU accession. Money launder: Government spokesman Yiannakis Casoulides said Cyprus was about to launch a counter offensive to silence the accusers that the island was harbouring money launderers. (Ed’s Note: If only we had learned anything from those accusations…) At the same time, the government said it was ‘unacceptable’ that the US Treasury Dept. named two lawyers as facilitating
sanctions-busting concerning Serbia. The Office of Foreign Assets Control named them as Tassos Papadopoulos and Pambos Ioannides, acting on behalf of Beogradska Bank, known as the ‘piggy bank’ of Slobodan Milosevic. Ioannides said he would sue the US government and Ambassador Richard Boucher. Limassol sewerage: The Limassol sewerage system is expected to go online by the end of June initially connecting 2,000 households and hotels from the ultimate goal of 10,000. The CYP 40 mln project will be partly funded by a Ecu 5 mln loan from the EIB. 1Q recovery: The economy continued its recovery in the first quarter, boosted by tourism and construction, while retail spending and car sales showed large growth, according to the Dept. of Statistics. Tourist arrivals were up 3.2% to 321,000 year-on-year, but British arrivals fell 16% to 112,000.
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