Significant delays in project implementation, unresolved legislative issues and the loss of anticipated state revenue have been identified in a special report by Cyprus' Audit Office on Leisure Boat Mooring Areas (ΧΕ).
According to the report, six marine areas designated between 2018 and 2019 remain reserved for private operators despite limited progress on construction works. At the same time, most applicants have not paid the annual management fees required under the scheme, arguing that their final planning and building permits have yet to be issued.
The entities examined were the Deputy Ministry of Tourism and the Ministry of Energy, Commerce and Industry.
Six designated sites remain largely undeveloped
The strategy for maritime tourism envisaged the development of small-scale leisure boat mooring facilities, with up to 150 berths and a maximum marine area of 15,000 square metres. These projects were designed to be privately funded, located on private land and exclude residential developments.
Between June 2018 and January 2019, the Council of Ministers designated six marine areas:
- Alaminos, Larnaca – Muskita Holdings Ltd
- Peyia, Paphos – Leptos Calypso Hotels Public Ltd
- Cha Potami, Kouklia – Venus Rock Estates Ltd
- Pachyammos, Kato Paphos – Sunset Boulevard / Actinolite Ltd
- Softades, Kiti – Alpha Panareti / Agi-Cypre Property 16 Ltd
- Softades, Kiti – M. Afxentiou & A. Stylianou Developers Ltd
While some operators paid fees in connection with licence transfers, others have paid nothing since the projects were approved.
Dispute over annual management fees
The central issue concerns the Annual Mooring Area Management Fee, which ranges from €75,000 to €262,000 per year, depending on the size of the site.
Three operators requested a suspension of the fee, arguing that paying the full amount before obtaining all required planning and building permits is disproportionate because they are not yet able to operate the facilities.
In one case, fees were paid in 2025 solely to allow the licence to be transferred to another entity. In another, fees were paid in 2020 for the same purpose.
One applicant paid the required fees and secured a licence but subsequently requested a suspension of future payments until all necessary permits are obtained, asking for previously paid amounts to be credited against future obligations once the land and marine area are formally released for use.
Another operator took no action at all.
Legislative amendment still pending
In March 2021, the Legal Service advised that charging the full fee before the lawful commencement of operations could raise constitutional concerns and issues related to the principle of proportionality.
As a solution, the Evaluation Committee proposed amendment legislation establishing a reduced interim fee to apply during the period before all permits are secured.
Despite agreement on the concept, the proposed legislation has remained pending for three years.
Audit Office warns of multiple consequences
According to the Audit Office, the current situation is producing several negative outcomes.
These include:
- Loss of state revenue due to unpaid fees.
- Long-term occupation of public marine space, preventing the state from using those areas for other public-interest purposes or broader maritime spatial planning.
- Private financial benefit without corresponding development, since the licences have acquired commercial value and have already been used in business transactions and loan restructurings despite the lack of project progress.
Recommendations
The Audit Office has called on the Deputy Ministry of Tourism to finalise and submit the amendment bill without further delay.
It also recommends introducing provisions allowing the competent authority to recommend to the Council of Ministers that designated mooring areas be revoked or licences withdrawn where operators fail, without justification, to comply with licensing timelines and fee payment obligations.
