While restoring a ferry link between Greece and Cyprus is gathering pace, the financial aspect of the project makes clear that it cannot go ahead without support from Brussels.

As things stand, running the line would generate estimated losses of EUR 5 mln per year for any investor taking on the venture.

Campaigners for the ferry link, DISY MPs Nicos Tornaritis and Annita Demetriou presented their case before the Cyprus-Greece Business Association this week.

It promised to undertake initiatives to promote the matter in both countries while the matter has also been tabled for discussion in parliament.

Both Tornaritis and Demetriou argue it is unacceptable that while Cyprus is surrounded by sea, the only means of travel is by air, there is no ferry line linking it with Greece and consequently with mainland Europe.

Tornaritis informed the Association that President Nicos Anastasiades endorses the project and has given instructions to the Transportation Ministry and the Deputy Shipping Ministry to prepare a study on the best course to follow in order to convince the EU to put money on the table.

However, businessmen involved in shipping and the tourist industry have expressed serious concerns over the feasibility of the project.

During the presentation of the project, members of the Cyprus-Greece Business Association found the project to be unfeasible without state or EU funding, which they believe would be difficult to achieve.

The clinch lies in the fact that the bloc keeps a tight grip on state financing projects.

Prohibitive costs

Without EU funding a ticket for a round trip to Greece on a passenger ferry may see travellers charged the extraordinary price of EUR 800.

The estimate is based on a 100 people per trip with the petrol needed for the journey there and back costing €150,000 in fuel.

This is an estimate given by Salamis Shipping CEO, Kikis Vassiliou, who said a ferry able to make the trip through the not so calm waters of the Mediterranean at speeds which would make it worthwhile for travellers to go by sea, would cost anything between EUR 30 to 40 mln.

Vassiliou said the calculated cost of a sea fare to Greece took into consideration only operating costs and not infrastructure investments that will need to be made.

He added that such a link would mean that cabins, cleaning services and food would have to be provided to passengers, rocketing costs to an extent that it is virtually impossible to cover by the state or a company.

Salamis Shipping CEO said that due to the high costs of ferry fares, the line will not be able to compete with airline fares.

“When a ticket to Athens costs as little as 50 euros, travellers will not opt to travel by sea and spend 20 hours at a cost which will be considerably higher.”

Salamis Tours operated the last ferry link to Greece from 1993 until 2000 when demand had faded out and trips stopped. Vassiliou explained that after airfares were liberalized in 2000, a series of airlines came to Cyprus and prices dropped dramatically.

“This led travellers preferring to travel by plane, and us to deal with unfair competition. The port taxes alone cost more than air tickets, which are 45 EUR at each port for each person. Following this development, we were forced to sell those ferries for scrap at humiliating prices,” said Vassiliou.

He also expressed concerns over whether the European Union would be willing to finance the line, as the Union does not finance interstate connections.

Vassilis Stamataris, the President of the Association of Cyprus Travel Agents echoed similar concerns saying that the ferry link should not be established for the sake of it. He said that the link should be sustainable and should be profitable for investors taking on the venture.

Stamataris also stressed that the distance between the two countries is significantly bigger than the distance between Greece and any of its islands.

“As an association, we believe in the necessity of the link. However, we feel that a study which will look into all aspects of the matter, should be carried out by a team involving all stakeholders from the government, to shipowners and travel agents,” he said.

Tornaritis argued that the EU has an obligation to support with any means available the ferry link between the two countries and by extension Cyprus’ connection to mainland Europe.

Greece and Cyprus are to undertake the task of convincing the EU to finance the link as they consider it vital for the two countries.

“The difference from the other times the matter was up for discussion is that for the first time it is to be examined through a European Union scope. The EU is all about freedom of movement of people and goods. Cyprus as an island and Europe’s most eastern state is cut off from Europe,” said the Tornaritis.

Demetriou said: “This is the first time the issue is being discussed on an official level between ministries. We would like to see the dialogue continuing on an institutional level.”

The MPs have had meetings with institutions in Greece and have been encouraged by how they were able to get EU financing for sea links to remote Aegean and Ionic islands.

“The project is feasible, and we are more than sure that if the project gets the green light, then there will be keen interest from local and foreign investors to get involved,” said Demetriou.

Association president Iosif Iosif said that the ferry link is a long-standing demand of the business group, which has previously taken initiatives in this direction, but due to the financial cost, it was not possible.

Iosif put forward the economic benefits of the link, stressing that it would be a window for Cyprus goods and exports to Greece and, by extension, to Europe.

“The Cyprus-Greece ferry link will strengthen both the economy and ties between citizens of the two countries, so the Association will take new initiatives towards achieving this goal,” he said.

He added that these initiatives will involve contacts with the governments of Cyprus and Greece, but also with the competent bodies of the European Union.