Dorita Yiannakou
Cyprus’ ambition to become a regional trade hub is running up against reality. Its strategic location offers clear advantages, but turning those advantages into a competitive trading center remains a distant prospect.
The effort has become bogged down in financial and legal questions that must be resolved before container transshipment—transferring containers through Cyprus on their way to other markets—can develop. Coordinating the many parties involved also appears to be an obstacle. They include the Transport Ministry, Limassol port’s private operators, the Cyprus Ports Authority and Eurogate Container Terminal Limassol Ltd., known as ECTL.
The Transport Ministry is in talks with container terminal operator Eurogate, examining financial and legal options to overcome obstacles to developing container transshipment.
Despite the island’s location and years of announcements about expanding its role in transit trade, unresolved issues continue to hold back progress.
The only tangible advance has been at the general cargo terminal at Limassol’s new port. Through partnerships developed with companies in recent years, it continues to serve roll-on/roll-off ships carrying vehicles from the Far East to Europe.
That activity is already a first step toward using Cyprus’ port infrastructure to move goods to third-country markets. Kathimerini understands that efforts are also underway to overcome the obstacles preventing similar activity at the container terminal.
Plans and possible options
The Transport Ministry is pursuing several initiatives with private port operators to develop container transshipment.
Under its cooperation with ECTL and the terms of the concession agreement, the ministry is examining different financial and legal options to address the challenges.
According to information provided to Kathimerini, the discussions focus on identifying ways around the existing obstacles and establishing the conditions needed for container transshipment to develop. So far, however, no specific decision or timetable has been announced.
Also under consideration is a trade zone at Larnaca Airport, where goods destined for markets across the wider region could be stored and held securely. The ministry says it is examining several options for that project, too, but has yet to settle on a model.
The proposal forms part of a broader effort to strengthen Cyprus’ position in regional freight and supply chains. Combining port operations with cargo storage and handling facilities could create further opportunities to attract international companies and develop new business.
For now, the move from planning to implementation appears a long way off. It depends on resolving outstanding issues and establishing a workable, lasting framework for cooperation between the state and private operators.
What other countries have done
While Cyprus is still drawing up plans, other island countries have moved ahead, investing consistently in transit trade. They have developed their ports into regional centers for transferring, storing and distributing goods, alongside their role in handling domestic imports and exports.
Malta offers the closest comparison for Cyprus, while Mauritius and Singapore provide other useful examples.
Malta has built a model centered on container transshipment. Available figures show that around 96% of its container traffic consists of cargo passing through on its way elsewhere.
Large ships bring containers to the port, where smaller vessels pick them up for delivery to other Mediterranean destinations. Malta Freeport, within Marsaxlokk harbor, also offers storage and distribution facilities and connections to more than 100 ports worldwide.
Like Cyprus, Malta is in the Mediterranean and uses its location to serve international shipping routes. It has, however, developed a clearly defined transshipment model, supported by dedicated infrastructure and a strong presence of major terminal operators.
Mauritius established the Mauritius Freeport in 1992. Today, it has free trade zones, comprehensive logistics services, refrigerated facilities, processing units and open-air storage areas.
Port Louis has shipping connections to Africa and India and uses networks of smaller vessels to reach neighboring ports.
Singapore, meanwhile, has developed an extensive network of free trade zones at its ports and airports. Goods can be stored without immediate payment of duties and taxes, which become payable when they enter the domestic market. Processing and reexporting goods are also permitted under simplified customs procedures.
Singapore is also developing its new Tuas port, incorporating automation and digital systems, while seeking to connect port operations with industrial and commercial areas.
