Friday, October 17, 2025

AIRPORT DELIVERY EXPERT

 Filenews 17 October 2025 - by Eleftheria Paizanou



The Government is looking for an expert to assist in the smooth delivery of Larnaca and Paphos airports to the state, a process known as Handback. In 2026, according to the Ministry of Transport, the tender documents will be prepared to select the expert who will undertake the support of the Handback process.

In accordance with Article 39 of the Airport Concession Agreement, five years before the expiry of the agreement, the procedure for the handover of the airports and the related assets is triggered. Under the original agreement, Hermes - which is the operator of the two airports - would manage the airports for a period of 25 years. Specifically, the concession agreement entered into force on May 12, 2006 and was to be completed on May 31, 2031. However, following last year's new agreement to start the second phase projects, the company will continue to manage the airports until November 11, 2032.

Despite the considerable time until 2032, the state is initiating the process of selecting an expert in a timely manner, so that the return of the airports to the state can be done on time.

Based on the new concession agreement, which was signed last December, the following is foreseen:

◆ Extension of the airport concession agreement by 18 months.

◆ Payment of a compensation amount of €30 million.

◆ Right to use an amount of €20 million from the concession fee in the form of a loan, with the payment of interest to cover the expenses of the Republic.

The agreement was made against,

◆ all the company's claims from the state, which exceeded €430 million.

◆ Waiver of Hermes' right to compensation from the operation of the illegal airport of Tymbou and the settlement of other disputes for the years 2015-2023.

◆ Withdrawal of the company's claims against the Republic.

The second phase

Phase B projects at the two airports are in progress. For Larnaca airport, it is estimated that they will be completed in November 2027, while earlier, in September of the same year, the works at Paphos airport will be completed. The cost will be €170 million. and will be paid by the management company after the signing of agreements with the banks and the consortium Bouygues Batiment International SAS and Iacovou Brothers (Constructions) Ltd, which has undertaken the construction works of Phase B. It is noted that for Larnaca airport, the projects concern expansion works with a total area of approximately 20,000 sq.m of the terminal building, the construction of new passenger embarkation/disembarkation gates with the creation of a new wing that will be connected to the main building, as well as an increase in aircraft parking spaces.

The duration of the completion of the works is estimated at 30 months. At Paphos Airport, projects will be implemented that increase the area of the building by approximately 30%, as well as the expansion of the southern parallel taxiway to upgrade the safety and capacity of the runway/taxiway system.

It is worth noting, according to the Financial Risks report, that the state will assume some obligations if something goes wrong with the agreement. According to the report, in the event that the contractor is unable to repay its loans, the Government has an obligation to pay the contractor's creditors 95% of the outstanding loans.

As it is pointed out, in such a case the agreement is cancelled and both the infrastructure and the assets of the project are transferred to the ownership of the Government.

Schengen projects

In addition to the above, the implementation of projects at the airports for the accession of the Republic of Cyprus to the Schengen zone is also expected. The Council of Ministers approved a proposal by the Ministry of Transport to upgrade the infrastructure of the airports of the Republic of Cyprus, so that they are able to operate with a separation of Schengen / non-Schengen zones. Already, according to the competent ministry, the procedures for the preparation of the required plans have begun, which are at an advanced stage. At the same time, the preparation of the tender documents for the supply of the necessary equipment is in progress.