Filenews 1 August 2024 - by Chrysanthos Manoli
In the open part of the Energy Committee meeting last Tuesday in Parliament, Energy Minister George Papanastasiou informed MPs that ultimately the Government is gearing up for tenders among contractors interested in completing the works at the pier of the Vasilikos gas terminal and for the other onshore infrastructure required. Mr. Papanastasiou attributed the decision to call for tenders to the need for transparency in the process and to give the opportunity to any interested party to submit a proposal.
However, information from various sources indicate that at the stage when the Energy Committee meeting was held behind closed doors, it was reported that the financial proposal to ETYFA by the subcontractors who worked until last March with the Chinese CPP is considered unprofitable. The information also states that it was reported that the difference between the valuation of the cost of the works (remaining to be done) in the ETYFA-CPP contract and the financial requirements of the subcontractors for these works is large, which is why tenders will be announced.
Call from ETYFA
However, Phileleftheros information from the environment of the consortium of VPSM subcontractors (Multimarine and Spanopoulos) states that no financial offer was submitted on their behalf for the execution of the remaining project, nor was a joint consensus agreement negotiated on the financial one.
According to our information, ETYFA informed VPSM consortium in writing on July 19 that, following its termination of the contract with the CMC consortium (CPP), it activates a clause in its contract with the Chinese company, which was apparently judged by the legal advisers to allow it to use the subcontractors to complete the Vasilikos project, without a new bidding process. From other legal sources we are informed that there is also the opinion that this clause in the contract cannot be used by ETYFA to avoid time-consuming offers, as some conditions provided for are not met.
Following ETYFA's notification, ETYFA's executives met with a delegation of the subcontractors on July 25, during which the companies presented the entire project -pier and land section-, the remaining works and other information. At the same meeting, the VPSM consortium informed ETYFA's representatives about the contract the two subcontractors had with the Chinese company for the projects they undertook, some of which they completed and some of which they did not, after CPP terminated their cooperation in March.
€40-45 million the pier!
Other information tells us that the contract signed by CPP with the subcontractors showed that the cost foreseen in the initial contract for the benefit of the Chinese company for the Vasilikos works was significantly less than the cost of the same project provided for in the contract signed by CPP itself with its two subcontractors. According to market participants, this finding confirms the perception formed by many that CPP and ETYFA signed a contract that did not correspond (underestimated) the real cost of the works provided for in the terms and specifications of the main contract signed in 2019. However, it is possible that the contract provided for increased or excessive amounts for other parts of the project (e.g. the ship) and less than necessary for the pier or land infrastructure.
From various sources we learn that the total amount agreed between ETYFA and CPP for the pier was just over €40 million, which industry experts consider too low/insufficient. Of this amount, it is estimated that around €30 million has not been spent. However, based on the written agreement that the Chinese company had made with the subcontractors, the remaining work is estimated at around €60 million. That is, in total, based on the CPP-subcontractor agreement, the final cost of the pier would be close to €70-75 million and not €40-45 million as agreed with ETYFA in 2019.
– It should be noted that during his presence on the Sigma news bulletin, on Tuesday evening, the general secretary of AKEL said that while the Government presented plan b for the works in Vasilikos as a simple and quick solution, at the meeting of the Energy Committee the minister said that they will go to tenders. Mr. Stephanou wondered why it was said until recently that the projects would proceed quickly with the current subcontractors, while now it is said that tenders will be announced, for which he estimated that they will require a lot of time, given the procedures in Cyprus and the possibility of recourse to the Tender Review Authority.
