Filenews 9 October 2021 - by Angelos Nikolaou
In addition to the €30 million that the government gives annually for the purchase of desalinated water, two of the five units claim another €32 million from the state that have to do with their renovation process. The requests of the two contractors were put before the Central Committee for Changes and Claims (KEAA) and after they were rejected, they are before the Legal Service for regulation.
It is noted that the state pays the amount of €30 million for the purchase of water from the units, as well as covering the cost of capital expenses for the desalination of Larnaca, Dhekelia, Episkopi, Vassilikos and Pafos. It is also obliged, at a minimum, to purchase a specified quantity of desalinated water or has the right to put the plant in reserve and pay the contractor a minimum amount to cover the capital costs. Unit prices per cubic meter are adjusted every quarter based on the following parameters: (a) labour index, (b) fuel index, and (c) actual electricity consumption.
Regarding the Larnaka desalination plant that has been in operation since 2015, there is a requirement from the contractor for improper delivery of the plant by the Water Development Department. The total amount of the claim is €17,629,080. After a relevant examination by the KEAA, the issue of the claim is at the Legal Service, where an effort is made to conclude an agreement with the contractor on how to resolve the disputes.
Regarding the Desalination Plant of Limassol that operated in 2012, there is a requirement from the contractor of €14,279,000, for a delay in the concession of the construction site and a claim of €680,383 for interruptions in the power supply to the desalination plant. Both requirements were examined by the CRL and rejected. At this time, the issue of claims is in the legal service, where an effort is made to conclude an agreement with the Contractor on how to resolve the disputes.
It is noted that for both cases, at this stage, the outcome cannot be predicted and therefore no charge can be foreseen in the Republic of Cyprus. It is emphasized that the works should be received by the Government at the end of the agreement and with the responsibility of the manager to be free of any defects.
