Cyprus: a new era of government support and private innovation

Cyprus’ first-ever deputy minister of shipping, Natasa Pilides, has had an immediate impact on the country’s maritime community.

The post was created in April 2018 and the initial work was setting up the new ministry and consulting the industry on its requirements. External consultants were used to produce the framework of stakeholder requirements. With this roadmap in place, Ms Pilides has developed the goals that need to be achieved, quickened the pace somewhat and completely altered how Cyprus is viewed as a place to do shipping business.

Cyprus has long had a reputation as a shipmanagement and technical management centre. The contribution of shipping and shipmanagement to the country’s economy is roughly seven percent of GDP. Cyprus is often referred to as the third largest shipmanagement hub globally, said Ms Pilides, but it also has a maritime hub of ancillary shipping services and products. These are the sectors that are receiving fresh attention, and cooperation with the private sector is key: “We are very happy with the cooperation we are receiving from the private sector,” said Ms Pilides.

The roadmap includes attracting more shipbroking shops, more shipping bankers and insurance companies and more shipping lawyers to the maritime cluster. The deputy minister said that there are more than 5,000 people employed in the maritime cluster across the 200 or so companies in the hub. There are also 55,000 seafarers employed on Cyprus-flagged ships.

Recruiting and training seafarers and shore-side shipping experts is the task of the country’s three maritime training academies. The Deputy Ministry of Shipping offers scholarships and financial support to students while they are at sea undertaking practical aspects of courses.

In terms of the future, the deputy minister has a clear idea of how to expand the flag. Cyprus has an EU-approved tonnage tax scheme and now offers 24-7 online ship registration, and seafarer qualifications. The deputy minister is keen to see Cyprus at the forefront of discussions at IMO level, and Ms Pilides recently signed a new agreement between the Republic of Cyprus and the “Recognised Organisations” (classification societies) that provide survey and certification services to ocean-going Cyprus-flagged ships. The twelve EU-recognised specialist organisations are as follows:

• American Bureau of Shipping (ABS)
• Bureau Veritas SA (BV)
• China Classification Society (CCS)
• Croatian Register of Shipping (CRS)
• DNV GL AS
• KR (Korean Register)
• Indian Register of Shipping (IRCLASS)
• Lloyd’s Register Group LTD (LR)
• Nippon Kaiji Kyokai (ClassNK)
• Polish Register of Shipping (PRS)
• RINA Services
• Russian Maritime Register of Shipping (RS)

The private sector has expanded with the takeover of the port of Limassol (now part of DP World’s portfolio) and the forthcoming privatisation of Larnaca port. Limassol port results and throughput are reported to have exceeded expectation. The deputy ministry is now tackling the long-standing plans for Larnaca port. At the time of writing, two Israeli companies are bidding for the project to develop the port and the adjacent marina, although this may be split from the project.

The nearby port of Vasiliko is also undergoing a radical shakeup. The growth in Cyprus’s oil and gas sector is one reason, but the port is also handling more tanker traffic at the clean-product oil-storage terminal and at the Electricity Authority of Cyprus’s oil terminal. The Electricity Authority of Cyprus intends to convert its power stations from oil to gas. Tenders for an LNG import facility opened in June 2019, but there is a rival plan from Energean to pipe Israeli gas into Cyprus. There are ambitions that this development could lead to Cyprus becoming an LNG exporter if offshore deepwater gas fields are developed in the eastern Mediterranean.