Filenews 16 September 2022 - by Vassos Vassiliou
A total of €250 million is claimed from the Republic of Cyprus by the company that manages the airports (HERMES) due to losses in its revenues,as a result of the pandemic. This was revealed yesterday before the Parliamentary Audit Committee by the Minister of Transport Giannis Karousos. The company is claiming another €15m. believing that (by their own fault) they paid the government more than it should have. And because the two parties do not agree on who owes to whom, perhaps the two parties will be led to arbitration. However, the Ministry of Finance asked the Parliament to release €191,238 for the provision of consulting services in order to assess the value of the extension of the contract (requested by the company) as well as for the valuation of its claims.
In the above package, the company also raised the issue of extending the contract for another five years, in order to recoup an investment of €150 million. which it was necessary, as the Minister said, to implement, but without doing so. As the Minister explained, the investment concerning Phase B of the contract was included in a relevant term. He explained that the implementation of Phase B, which concerns the service of travellers, must be implemented taking into account that the number of passengers has grown from 6,000,000 when the contract was applied, to 11,000,000.
Mr. Karousos referred to the above following what the Auditor General Odysseas Michaelides said, developing the findings of his report on the Ministry of Transport. Odysseas Michaelides also criticized the government's stance in handling these issues.
Commenting on a term included in the contract for compensation of the managing company when its proceeds from the operation of the illegal airport of Tymbou are affected, the Minister of Transport, observed: We inherited an issue concerning compensation for Tymbou. Such a term should not even have been included in the contract, but it does exist. The Auditor General described the relevant term as strange and added that the fact that after the opening of the barricades, the airports of the Republic of Cyprus are also used by Turkish Cypriots, but also by tourists who choose Larnaca airport to arrive legally in Cyprus and then, unfortunately, end up in the occupied areas for their holidays, should also be taken into account. These revenues were not taken into account, the Auditor General said.
Regarding the claim of €15 million. from the managing company, the Auditor General said, that even if he was right, the amount of time he could claim the money expired.
He also referred to the contracts with the bus operators, indicating that in total (for the ten-year period of the contract) they required €1 billion and eventually they will get about €650 million. He further criticized the fact that while the Audit Office was asking for the tenders related to the new (current) contract to be announced in time, there was a delay and as a result in Paphos no bid was awarded. As he explained, the ministry of transport assigned the routes to the Famagusta bus company, which appointed the Paphos urban bus company as its subcontractor.
However, both the director general of the ministry, Giannis Nikolaidis, and the minister of transport, said that Paphos could not be left without buses in July and August, that is, in a tourist season, so this temporary solution was chosen until the offer was awarded.
Eleven miles, twelve hours
On the issue of tenders concerning various public projects, the Auditor General was in favour of the design//construction method, considering that on the one hand the procedures are completed in a shorter period of time and on the other hand, the one who wins the bid cannot claim compensation for poor planning and delays, as is the case with the usual tender procedure.
He also made reference to the House of Representatives building which was designed in 1995, and when the time came to implement it, several years had passed, so a review of the plans was required. In the end, the architect was paid for his studies, but the project was placed on the shelf, while in the Republic the expenses remained.
However, both the Department of Public Works and the other services of the ministry, attributed many of the problems created to understaffing.
