The government is set to garner over €1 billion in revenue from airport concession fees during the period 2006-2025, under its longstanding agreement with the managing company HERMES. In the current fiscal year alone, the concession fees are projected to exceed €90 million, marking a 7% increase compared to 2024. These figures have been meticulously incorporated into the Ministry of Transport’s budget, which is scheduled for presentation at 9:15 a.m. before the Parliamentary Committee on Economic Affairs by Minister Alexis Vafeadis.
Robust Budget and Strategic Investments
The Ministry’s budget is described as monumental by Cyprus standards, reaching an estimated €1.61 billion for 2026. This comprehensive financial plan encompasses a dedicated allocation of €1.05 billion from the ministry’s own funds, supplemented by an additional €556 million earmarked for projects managed through the Ministry of Transport in collaboration with other departments.
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Minister Vafeadis has outlined a rigorous schedule of projects, including ongoing works worth €539 million from the ministry’s portfolio and an extra €273 million from other government bodies—totaling €812 million. Concurrently, a further €547 million in projects is under tender, split between €272 million by the ministry and €275 million from other sectors. Over the next 12 months, the ministry is poised to sign contracts for works worth approximately €244 million, with additional projects from other ministries bringing the total to €252 million.
Revitalizing Air Transport Infrastructure
The significant investments extend to airport infrastructure, where major enhancements are underway. With the completion of Phase B, Larnaca Airport’s capacity will increase to 12.4 million passengers per annum, while Paphos Airport will expand to accommodate 5 million passengers annually. These improvements are expected to facilitate sustained growth in air traffic, yielding substantial economic benefits.
Specifically, Larnaca Airport is set to undergo an expansion covering 20,000 square meters that includes a new terminal wing with integrated departure and arrival gates, additional baggage claim belts, dedicated areas for passport control and security checks, an expanded commercial zone, and increased aircraft parking capacity. In parallel, Paphos Airport is implementing enhancements to boost terminal capacity by approximately 30%, streamline passenger processing, and improve operational flexibility through the extension of its southern parallel runway.
Connecting Communities and Enhancing Roadways
The comprehensive budget also prioritizes key transportation links that connect mountainous and semi-mountainous regions with urban centers. Among the flagship road projects are:
- The Peripheral Motorway of Nicosia: Phase B3 valued at €35.6 million and Phase C at €113.05 million.
- The A2 Motorway from Limassol to Saïtta, with an initial phase costing €83.3 million, with project commencement slated for the third quarter of 2026 and an anticipated expenditure of €8.3 million within that year, targeted for completion over three years.
- The Study and Construction of the Denea – Akaki – Astromeriti segment is estimated at €129.7 million.
- The Astromeriti – Evrichi Motorway is estimated at €88.6 million, with project milestones already in motion.
- The Motorway from Nicosia to Palaichori, budgeted at €77.6 million, is scheduled to commence in March 2023 and is anticipated to conclude by September 2026.
Mitigating Traffic Congestion and Advancing Public Transport
In addition to large-scale infrastructure projects, the government is dedicated to alleviating traffic congestion and improving urban mobility. Initiatives include:
- Comprehensive augmentation and optimization of the road network.
- Implementation of a Sustainable Urban Mobility Plan (SUMP) and enhanced public bus services.
Specific projects under these categories involve the completion of phases for the Nicosia Peripheral Motorway—Phase B3 commencing on July 28, 2025 (with an estimated €35.6 million spent in 2026 over 36 months) and Phase C starting in the first quarter of 2026, with a projected cost of €113.05 million and an expected duration of 40 months. Moreover, the study and construction of the Denea – Akaki – Astromeriti route is scheduled to begin in the first quarter of 2026 with a 3.5-year timeline.
Upgrading Public Passenger Transport Services
The plan also includes a strategic enhancement of public passenger services. The budget allocates €87.7 million towards contract agreements over the year, extending services across roughly 40,000 kilometers. Notable measures include the expansion of the ‘Pame Express’ service, which currently handles 10,000 passengers per month, and the extension of the Door-to-Door service from 27 to 29 schools, benefiting approximately 1,050 students per route.
Additional investments of €43.6 million are earmarked for new bus shelters, upgraded stops, and infrastructural improvements. These measures are complemented by initiatives that reduce student fares, offer 50% subsidies for elderly riders with motion cards, and provide free transportation for low-income pensioners, all supported by heightened technical oversight and the addition of dedicated bus lanes.
This robust budget and strategic deployment of funds underscore the government’s commitment to elevating the nation’s transportation infrastructure, thereby stimulating economic growth and enhancing the overall quality of life for citizens.
