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First stone laid on new airport June 24, 2006

Posted by grhomeboy in Transport Air Sea Land.

‘42 months from now we will have a new and modern terminal building’

HERMES Group chairman Nicos Shacolas yesterday pledged that the new Larnaca Airport, capable of handling 7.5 million passengers a year would be completed on time in 2009.

Shacolas was speaking at a ceremony to mark the laying of the foundation stone for the new terminal building, 31 years after Larnaca airport became the island’s main entry point in the wake of the Turkish invasion.

“We will honour the contract that we have signed with the government of the Cyprus Republic down to the last detail and in three and a half years without any delays we will all be here again to inaugurate the new airport and for that we can feel proud,” said Shacolas.

Shacolas said that 6,000 people would be permanently employed at the new airports. He also said that over the next three and a half years around 2,000 people would be working on the construction of the new terminal.

The foundation stone was laid jointly with President Tassos Papadopoulos as dignitaries and diplomats joined officials for the historic occasion. “Forty-two months from now we will have a new and modern terminal building that will further contribute to Cyprus’ development, offering the island a special place in the eastern Mediterranean region”, Papadopoulos said.

He said it was the government’s most important project so far and would make Cyprus an even more important player in air transport in the region.

Harking back to 1974 when Nicosia Airport came under UN control, Papadopouolos said: “Seven months after the disaster, we built Larnaca Airport as a temporary solution. The first year, 200,000 passengers used the airport and today, 31 years after, it serves around five million passengers a year”, he said. Larnaca is only designed to accept 2.5 million passengers a year as it stands.

Phase one of the new airport will see Larnaca capable of handing nine million passengers. Papadopoulos said phase one, which would also include the upgrade at Paphos would cost 500 million euros.

The total cost including construction plans and provision for future extension comes to around 643 million euros.

The project is being carried out under the Build Operate Transfer (BOT) system where Hermes will construct the airport and run it for 25 years.

Communications and Works Minister Harris Thrassou said that after 18 months of negotiations the agreement with Hermes was signed on May 11 this year.

Under the agreement the government will receive 33 per cent of the gross income from the company and an additional 3.5 million euros every year, Thrassou said.

He said the area of the building to be constructed during the first phase would be 95,000 square metres and will serve 7.5 million passengers a year. The second phase would increase the area to 112.000 square metres with a capacity of nine million passengers a year, Thrassou said.

Papadopoulos also paid tribute to former Communications and Works Minister, now opposition DISY vice chairman Averoff Neophytou for his insistence and determination that a BOT project was the right road to take in constructing a new airport, despite the prevailing opposition at the time.

The project will see the construction of two passenger terminals at both airports, featuring VIP and CIP (Commercially Important Persons) halls, CCTV, and the CUTE (Common Use Terminal Equipment) system

This allows an airport to organise efficient gate and check-in counter allocations and system management. The changes transform the two airports into fully modern facilities, with walkways leading passengers directly from the new terminals to the plane.

The project has however had its share of controversy. Talks with the initial successful bidder, the Alterra/Cybarco consortium, broke down and the contract was later awarded by default to the next in line bidder, Hermes.

Hermes participants include Charilaos Apostolides, the Shacolas group CTC, Egis Projects and Iacovou Brothers, together with Ireland’s Aer Rianta International, and French interests Bouygues Batiment and the Chambre de Commerce et D’Industrie Nice Cote D’Azur.

Two of the rejected bidders then claimed irregularities in the tender process, with one of the trying to freeze the signing of the agreement. A motion by Alterra/Cybarco for an interim order to put the agreement on hold while its allegations were being investigated was rejected by the Tenders’ Review Authority.

The second rejected bidder, the J&P-led consortium, has lodged a complaint with the European Commission, alleging that the deal was tailor-made to suit Hermes’ interests and disqualify all of its competitors.

The European Commission found there were grounds to investigate the allegations and informed the government last November. It emerged during the negotiations with Hermes, that the government decided to take over security at the airports, ostensibly for national security reasons. But the European Commission said this might constitute a substantive alteration of the terms of the agreement.

According to EU law and directives, any essential change to a government procurement contract means the tender must be scrapped and bidders invited to submit their offers all over again.

The government however has forged ahead, worried that more delays could set the project back until 2013.

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