Filenews 8 October 2021 - by Vassos Vassiliou
The State lost tens of millions of euros from renting fillets of the beach of Ayia Napa, which benefited hoteliers and as the Auditor General characteristically mentioned, the phenomenon began in 1970 under Makarios.
As he testified yesterday before the House Standing Committee on Control, from a contract, if the market rent were paid, the state would receive €6 million in recent years. annually but collects €1-€1.5 million. In addition to this contract signed in 1970, the remaining four were signed in the period 1981-1982 as part of the reactivation of displaced hoteliers.
His mention that the system allows hoteliers to determine the rent they pay themselves also caused a sensation. Specifically, they can pay either a percentage of the value of the state plot they rent (currently around 5%) or pay rent depending on the receipts they declare they have each year and not on the actual receipts. It is characteristic that even in the period 2015-2016 when tourism reached its peak, they declared relatively limited revenues.
As Odysseas Michaelides explained yesterday before the House Standing Committee on Audit, the terms of the contracts were such that the rent is clearly lower than the rent that had to be paid. As he said, in some cases, even this low rent was not paid, resulting in the creation of debts of hundreds of thousands of euros that were paid by hoteliers before the renewal of contracts that are valid for 99 years, but "break" in periods of 33 years.
A continuous contract for 99 years applies only to the hotel "Nissi Beach" whose beach is perhaps the largest seaside plot in terms of land value available to the Republic of Cyprus (118,396sq.m.), as stated by the Auditor General.
As he explained, in the year 2002 the value of the beach was estimated at €63 million. while relatively recently it was estimated at €130 million.
He clarified that in the rest of the contracts about 25% of the market rent is paid, so this is about four times lower than it should have been. Regarding this aspect, he said that there may also be an issue of unfair competition against the other hoteliers of Cyprus.
Especially for the remaining four units, he mentioned that unit "B" had to pay €148,000 but pays €50,000. Unit "C" had to pay €800,000 per year but pays about €140,000. Unit "D" had to pay €170,000 and pays €50,000. Finally, unit "E" had to pay €750,000 and pays €100,000.
The Auditor General also cauterized the fact that although the contracts were signed for the reactivation of refugee hoteliers, one of them sublets the space to another hotelier. He also suggested that obviously the rent he collects is not the low sum he pays to the government but rather fluctuates close to the market so it is higher.
The director of the Department of Forests, Charalambos Alexandrou, said that its Department, which manages these plots, implements the contracts which, according to the opinion of the Attorney General, cannot be differentiated since it is required that both parties (hoteliers and government) agree. "We made efforts and collected the rents that were pending before the contract renewal," he said.
