In December 2020 Cyprus launched an unsuccessful tender for re-establishment of the Cyprus/Greece ferry connection. A new tender on more viable terms is on the cards, which could further address concerns raised by the Larnaca authorities.
The maritime ties between Cyprus and Greece have long been established. The physical proximity between the two countries almost assumes a ferry link between them. Alas such a connection has been absent since 2000, owing to a fall in demand associated with the liberalisation of air transport on one hand, and political turmoil in the Middle East on the other.
Driven by popular demand, in December 2020 the Cypriot Government launched a tender for the re-establishment of the Cyprus-Greece ferry line, on the following general terms:
- 36 month contract with optional 12 month extension;
- 100% national resources financing;
- €000.000 for the first 3 years with a ceiling of €5.000.000 per service year;
- Limassol or Larnaca to Piraeus route;
- 31 return sailings per service year all-year round; and
- Ro-Pax vessel, including back-up vessel.
The choice between the two candidate ports of Larnaca and Limassol, to link with the port of Piraeus (Terminal of Keratsini), was ultimately left with the bidders. The deadline for submission of tenders was marked as 29 January 2021.
Larnaca’s case
In the run-up to the January 2021 deadline, a joint statement issued by the Larnaca Municipality, the Larnaca Chamber of Commerce and Industry, and the Larnaca Tourism Board, raised issues of bias towards selection of the port of Limassol. More specifically, the Larnaca authorities highlighted distance as the main selection criretion bearing a disproportionate 55% weighting, while it is a given Larnaca is located further from Piraeus than Limassol. By contrast, it was noted that time of completion of the enterprise did not feature in the selection. Similarly, though price was another crucial selection criterion, port fees were allegedly not taken into account. It was also felt other factors such as transport of private passengers accompanied vehicles skewed the competition towards Limassol. Finally, the Larnaca authorities expressed their conviction the city’s attributes were being ignored, such as the fact the island’s main airport is located in Larnaca, which is often viewed favourably by ferry lines, as well as recent private investment potentially rendering the port a vital hub in the Eastern Mediterranean.
The Deputy Ministry’s response
The Cyprus Shipping Deputy Ministry issued a response on 25 January 2021, addressing some but not all of these points. Specifically, it was noted the duration of the voyage rather than distance was the criterion applied, and that it featured a 55% weighting on 65% of the total. It was also highlighted the choice of port was ultimately left with bidders. The Deputy Ministry therefore dismissed any arguments of unequal treatment between the two ports.
The selection criteria
Analysis of the tender documents confirm the Deputy Ministry’s case in respect of the relative weighting conferred to voyage duration rather than distance. More specifically, the selection formula applied in the tender is:
where:
L = the Overall evaluation mark
Τ = the Technical Offer evaluation mark, and
C = the relative cost of the Financial Offer = (Financial Offer of Lowest Bidder/Financial Offer under Evaluation) x 100
The Technical Offer evaluation mark (T) is analysed in Form 10 of the tender documents and features the following breakdown:
|
Total Duration of Sea Journey
|
Max 55%
|
|
Age of Vessel
|
Max 35%
|
|
Food, Hospitality and Entertainment Facilities
|
Max 10%
|
It is however noted that this technical breakdown could just as easily incorporate proximity to the airport as well as other factors highlighted by the Larnaca authorities. Moreover, one observes that taking away the age of the vessel, which should not theoretically vary between the two ports, the weighting of ‘other factors’ is relatively small compared to duration.
The Outcome / Future
It is now well known that the tender did not attract any bid, despite initial interest expressed by 24 carriers. The Deputy Ministry attributed the outcome to COVID 19-related uncertainty affecting vessels carrying passengers and/or their private vehicles.
The Deputy Ministry is however attempting to re-launch a tender within 2021 for operations commencing 2022. In an effort to secure a bid Cyprus is liaising with the European Commission in order to offer carriers more viable terms. These include the launch of a seasonal rather than all-year round service lasting 6-7 months, given several carriers felt unable to commit vessels for the entire calendar year.
Should the European Commission respond in positive fashion, the Deputy Ministry could potentially incorporate some of the factors raised by the Larnaca authorities in fresh tender documents. We continue to monitor this story and shall provide updates accordingly.
For more information please visit our website microsite on Shipping or contact Mr. Ioannis Generalis at This email address is being protected from spambots. You need JavaScript enabled to view it..
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