THE government said yesterday it will try to salvage a multi-million deal with a Chinese investor who withdrew his interest in developing the old Larnaca airport building, citing time-consuming and complicated state procedures.
Communications Minister Efthimios Flourentzos said he was meeting Chinese businessman Yang Qi on Wednesday in a bid to convince him to rethink his decision, conveyed to the government in a letter received on August 14.
Flourentzos rejected the view that red tape had killed the investment, suggesting instead that it was the recent controversy sparked by the revelation that a presidential aide was allegedly involved in the deal.
“I would have considered it logical for any letter regarding delays and time-consuming procedures to arrive 15 or 20 days ago,” the minister told state radio.
“Suddenly, after all the noise, this letter arrived. It’s a bit strange.”
Marios Ieronymides, the head of President Demetris Christofias’ diplomatic office, resigned on August 10, following a newspaper report that he had accompanied Yang Qi - sole shareholder of Far Eastern Phoenix (FEP) - at a signing ceremony with airports operator Hermes on March 23, 2012, for a 19-year lease of the old airport.
He had also accompanied the Chinese businessman to two other high-level meetings with Cypriot officials.
The paper said his wife, Tatiana Ieronymides, served as co-director of FEP for three years, resigning on March 17, 2012, six days before the signing.
While Ieronymides claimed no wrongdoing, he acknowledged that his presence at the meetings was not appropriate and submitted his resignation.
The cabinet has already announced it would launch a disciplinary investigation into the affair.
“My effort would be to convince him [Yang Qi] to withdraw his letter,” Flourentzos said yesterday. “There were no time-consuming and complicated procedures on our behalf. On the contrary, procedures had been expedited.”
The government had agreed to extend the deal to 50 years – under certain conditions -- as was demanded by FEP.
On July 26, FEP sent the requested documents, which were about to be evaluated when the report appeared some two weeks ago.
“We are a legally structured state based on laws and the constitution; we are obliged to follow legal procedures when examining any similar proposals,” the minister said. “No concessions will be made for any reason.”
Government spokesman Stefanos Stefanou said the administration could not be accused of anything concerning the deal.
The agreement is private, between two companies and “the government cannot be accused of celebrating over a ‘bubble investment’,” Stefanou said in a written statement.
He added that the government was asked to help complete the deal and the decision was to help but “within the framework of the law and regulations.”
“Let those speaking of a supposed scandal point out where there is a scandal in the procedure followed so far,” the spokesman said.
The Cyprus Investment Promotion Agency (CIPA) sided with the Chinese businessman’s view concerning the red tape.
“I consider the Chinese investor’s reaction justified,” CIPA chairman Christodoulos Agastiniotis said. “The minister can make any associations he thinks are correct, I cannot.”
He said CIPA had raised the matter of expediting the evaluation of foreign investment in January.
This was not done until July when the cabinet set up a ministerial committee to handle the Chinese investment in which CIPA does not participate.
The development played straight into the hands of the opposition, which also criticised the administration of trying once more to pass the buck.
“The government’s attempt to constantly transfer its own responsibilities for its own repeated blunders and failures to third parties has become comical,” main opposition DISY spokesman Haris Georgiades said on Sunday.
“However, the consequences of the government’s incompetence are serious and have contributed to the lack of any prospects for growth and the worsening of the recession and unemployment.”
Earlier Sunday, Stefanou accused the opposition of “killing” this and other investments “creating scorched earth conditions so that they can blame the government.”
“We consider this (Chinese businessman’s withdrawal of interest) the result of this policy and the war of attrition within the country,” Stefanou added.