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Economy

Legal Battle Halts 1.2 Billion Euro Development of Cyprus’ Larnaca Port

NICOSIA – The failure of a development company to renew a letter of guarantee has halted a planned €1.2 billion ($1.31 billion) concession agreement to modernize Cyprus’ port of Larnaca.

Operator Kition Ocean Holdings held a long-term lease to develop and operate both a yachting marina and a commercial port, but the government declared the company was in breach of contract over the letter, according to Reuters.

Company officials denied this and stated the government acted after Kition sought to implement the concession agreement, with no reasons given by either side regarding their contentions.

Larnaca serves as the staging post for a maritime shuttle of international aid into the Gaza Strip, bringing needed supplies to civilians during Israel’s invasion in search of Hamas terrorists responsible for killing 1,200 Israelis in October 2023 raids.

Kition Ocean Holdings had failed to renew a letter of guarantee for the project, which legal authorities considered a contractual breach, Transport Minister Alexis Vafeades explained, as reported by the news agency.

“This effectively activates a process where the port and the marina… are reverting to the administration of the state,” Vafeades said, without explaining why the state no longer wanted the development.

Kition Ocean Holdings claimed the government’s decision breached the terms of its agreement with the state. “We applied to the court two months ago to force the government to follow their own agreement and to meet and resolve disputes in line with the agreement,” the company stated.

The company further added, “The government’s behavior undermines the rule of law that should exist to protect investors,” emphasizing the mutual blame both sides were attributing to each other.

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