- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Chinese multi-million airport deal collapsed

THE PROPOSED multi- million Euro investment by the Chinese firm Far Eastern Phoenix to redevelop the old Larnaca airport has collapsed.

The news was given in a briefing to reporters this morning by government spokesman Stephanos Stephanou. It seems that the company informed the government of its decision to withdraw last week.

“I can confirm that we have received a letter from the Chinese investor that he is no longer interested in the Larnaca project”, Stephanou said.

In March, Far Eastern Phoenix signed an agreement with Hermes Airport to develop the old Larnaca airport with a large commercial showroom for Chinese products and a logistics centre. At a cost of around €600 million, the project was to include exhibition areas, re-import of products and a small conference centre.

According to the agreement, Far Eastern Phoenix would have taken over the management of the area for the next 19 years and to justify its massive investment, the Chinese company wanted to extend the deal for a further 31 years.

At a press conference following the signing of the agreement Mr Iacovou said:

“We have been ensured that thousands of Cypriots will be employed”, adding that “I expect that a number of foreign workers will be employed too”.

He continued “It is an agreement of exceptional importance, which will benefit not only the airports but the country in general since we expect that a large number of new job posts will be created for the Cypriots and the economy of Cyprus will be boosted, especially in those difficult conditions”.

However, the decision on whether to extend the deal for a further 31 years had to be taken by the island’s government.

But five months later, the government had been unable to decide whether to approve the 31 year extension to the deal or not.

Hermes warned the government in June that its delay could result in Cyprus missing out on the investment altogether. It appears that warning went unheeded.

In this morning’s briefing the government spokesman stressed that this latest development “was as a result of a degenerative war waged on the domestic front”, adding that “some people are obstructing anything from happening in this country”.