Reorganisation and recognition: Cyprus minister reflects on two years of progress

Paul Gunton

Paul Gunton · 24 February 2020


Next week (1 March) marks the second anniversary of Cyprus Deputy Ministry of Shipping and it has already established itself as a valuable – though long awaited – support for the island’s ‘blue economy’.

For many years, the Cypriot shipping community had pushed for a dedicated ministry. The former Department of Merchant Shipping had supported the sector for 41 years as part of the Ministry of Transport, Communications and Works but the influential international shipping community regularly called for a dedicated ministry. Coupled with the growing Cypriot ship register, the sector contributes about 7% of the country’s GDP and employs about 3% of its workforce, according to the Cyprus Profile website.

CMMI and CSM signed an MoU for a research project in January. Front row, left: Zacharias Siokouros, CEO of CMMI; right: Mark O’Neil, President of CSM (image: CSM)

In an exclusive interview with ShipInsight, Cyprus shipping deputy minister Natasa Pilides confirmed that the ministry owed its origins to that industry pressure and said that its creation also set a precedent for the island’s government structure. Under the country’s constitution, there is a limit on the number of government ministries and creating the concept of ‘deputy’ ministries got around that. So although her title is ‘deputy’ minister, that is because she heads a ‘deputy’ ministry; she is Cyprus’ shipping minister.

Creating a dedicated ministry for shipping was a popular political decision. “It was unanimously approved in parliament, which is probably a first,” she said. And where shipping laid the way, other industries are following the same path: tourism got its own deputy ministry in January 2019 and on 1 March a deputy ministry for innovation will be established.

Industry expectations

Ms Pilides has achieved a lot in her first two years. All the work done by the Department of Merchant Shipping has transferred to the ministry, giving it a staff of 160, and she was well aware of the industry’s hopes. “We had to respond to all their expectations regarding a more bespoke and immediate service,” she said, and listed some of the changes that have been made.

Its responsibilities are based on a national strategy on shipping which created specific goals and KPIs that underlie its action plan. “It’s a lot more focussed than it was before,” she said. “We are able to take and implement decisions fast.” The services available to shipping have been reorganised “and it’s been operating quite well since then,” she said.

Cyprus shipping
Natasa Pilides heads a groundbreaking deputy ministry (image: Cyprus Deputy Ministry of Shipping)

Now, there is a 24/7 assistance service and ships can be registered on any day. Online verification of seafarer certificates is now available and seafarers themselves can now add information to their records if they would like to share information with shipping companies that use the system. New agreements have been signed with the register’s recognised organisations (ROs), they can submit electronic certificates and more ROs have been singed-up. Next on the list is an online ship registration portal that will go live before the end of this year.

“Our service is much more proactive” and is informed by feedback from response forms and from “hundreds of meetings with all our clients over the world,” Ms Pilides said. Based on those conversations, “I think people are happy with what we’ve done so far but we need to continue to improve further.”

The Cypriot tonnage tax scheme – which secured EU approval in December for a second 10-year period – is helping attract companies to the island, she said, and the register’s fee structure is also going through an overhaul. Last year, fees for registering oceangoing vessels and their mortgages were abolished and other fees have been simplified and some have been reduced.

But other fees have not been increased to compensate, she said. “The benefit to the economy of having a larger cluster with more companies and more vessels more than makes up for lost fees.” And there are more cuts to come: although tax rates will not change, a discount scheme is being developed that will reward ‘environment-friendly vessels’. Some details, including defining how ships will qualify and how the discounts will respond to future technological developments, are still to be finalised but it will be presented to parliament for approval soon and will then operate for an initial period to 31 December 2029.

Local support

As well as the focus on international shipping, the deputy ministry and the blue economy also serve the local shipping community. After our interview Ms Pilides was due to visit a small shipyard in Limassol, which she said was seeing growing demand, and in March a new marina is due to open in the holiday resort of Ayia Napa.

The deputy ministry also supports initiatives to encourage Cypriots to train for work in the blue economy. One organisation that is especially involved in this work is the Cyprus Marine and Maritime Institute (CMMI), which opened in October 2019. Its aim is to be an independent, international, scientific and business centre of excellence that will encourage cooperation between the maritime industry and the international academic community.

Its CEO, Zacharias Siokouros, joined our conversation. He explained that it is co-funded by €30M from the European Union’s Horizon 2020 initiative and the Cyprus Government, with an additional €10M from local industry. It is modelled on Southampton Marine and Maritime Institute in the UK, which is one of its international partners.

Mr Siokouros paid tribute to Ms Pilides for her involvement in supporting the funding proposal to the EU in November 2018. “It helped a lot that we could say we now have a dedicated ministry of shipping as an indication of how important shipping for Cyprus,” he said. Now that CMMI is open for business, he is recruiting staff, including scientists and other specialists.

But CMMI is already working with industry. On 9 January is signed an MOU with Columbia Shipmanagement for a project called Digital Waves, which includes research and innovation into topics such as gathering data on ships, coupled with trends in connectivity and artificial intelligence.

He also described an EU-funded three-year scheme that began in November to “engage the younger generation in the blue economy.” It is called Sea of Experience and CMMI is one of six organisations involved – three from Cyprus and three from Greece. “The older generation do not have the luxury of spending a lot of time on ships with the younger generation so we are trying to find how we can use new tools to achieve this kind of mentoring,” he explained.

Along with other initiatives, such as career fairs and school visits to enthuse teenagers, he hopes to instil a renewed interest in maritime opportunities. Despite Cyprus’ long marine history “we have turned our backs to the sea,” he said. He hopes to change that perception by introducing young people to opportunities “both in shipping and beyond shipping.”

Technology testing

Another, longer-established, organisation also acknowledged the support available from the deputy ministry. Prevention at Sea was founded in Greece in 2014 and moved to Cyprus in 2015. It is a maritime technology and marine risk prevention specialist that develops tools and risk assessment techniques to prevent human-generated risks escalating.

Its latest product is the Fleet Information SHaring platform (FISH), which is an online ship data repository that has been designed to standardise and automate ship inspection data. Its founder, Petros Achtypis, took part in our interview and said the platform is due to go live in June.

Having been in business since before the deputy ministry was established, he has seen the transition at first hand. “We are very happy,” he said, because his systems – which use blockchain technology – are ‘disruptive’ and the shipping industry can be conservative in adopting such technology, he said. But he praised Ms Pilides and said that “having the deputy ministry on our side, we can make big steps forward and can introduce our concept” to the industry.

During FISH’s initial development, experts in the deputy ministry provided advice on how the system could be developed, in particular about the data and information that should be recorded. Now, as it nears completion, he is now benefiting from some very practical support: the deputy ministry’s staff are piloting the platform, along with some local shipping companies, in particular to provide feedback in relation to its use interface.

As well as its responsibilities for the ship register and its support for the local shipping industry, the deputy ministry plays an important role at IMO and Ms Pilides emphasised its success in November when it was re-elected to IMO’s Council as one of its 20 Category C members. It has been a member of the Council since 1987 and this time secured 140 votes from the 165 voting countries, putting it in fourth place in the ballot.

She sees Cyprus involvement there as important. “Our positive relationship with both IMO and the EU is really important and necessary for the industry,” she said. “Hopefully, we can continue to have those good relations and contribute in a meaningful way.”

And then she was off to visit that shipyard.

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