Filenews 25 October 2022 - by Eleftheria Paizanou
New incentive plans for airlines, which are hoped to contribute to the expansion of Cyprus' connectivity, the expansion of routes and the increase of visitors, were prepared by the Government, in cooperation with Hermes Airports, following the sudden announcement a few days ago of an end to the incentives by the Ministries of Finance and Transport.
Last month, the Government announced that it was suspending the incentive plans that were running, as well as consultations on new plans, annoyed by criticism from the Audit Office and opposition MPs, in relation to the second phase of the airport projects and the compromise proposal negotiated by the Government together with Hermes to extend the airport concession contract until 2036. As it seems, the Government in the meantime has had second thoughts - after the fierce reactions of organized tourism bodies - and wanting to continue the increasing trend in tourist arrivals, in the coming days it will put before the Council of Ministers new incentive plans.
The new plans were prepared following consultation between the Ministries of Finance and Transport and Hermes, the airport managing company. Yesterday, Finance Minister Konstantinos Petrides, responding to a question submitted by DIKO MP Christiana Erotokritou, during the discussion of the state budget for 2023 in the Parliamentary Committee on Finance, said that the final plans are ready. As he said, the Government a few weeks ago had submitted to the company its final position, which is being evaluated. According to the minister, discussions with the Ministry of Transport are in the final stage, with the aim of getting the plans approved as soon as possible.
As "F" is informed, the plans will be approved by the Council of Ministers in one of its next sessions. A competent government source told "F" that the new plans will be differentiated from those that were recently terminated. Specifically, the new proposal foresees that 51% of the projects will be funded by Hermes and 49% by the Government. It is worth noting that the previous projects were financed by Hermes with 60% and the state with 40%. A point of contention in the suspended plans was the airport concession fee, which accounts for 33% of gross revenue. The company demanded that its cost of financing the projects be deducted from the concession fee, which the Audit Office disagreed with.
