Filenews 11 June 2025 - by Vasos Vassiliou
The Development Licensing Directorate (AIA) of the EDA of Nicosia, which will check citizens and professionals whether they comply with the legislation on construction, in its first act violated the legislation it currently implements in its own building.
The unbelievable thing also happened, the contract for the construction of an additional floor was signed on 4.6.2024 and the following 5.6.2024 the works were almost completed. And of course, the project was assigned directly, without accents, and there was no reason to secure a planning permit and a building permit. And along with that, the deal was inflated by about €200,000. The delivery time was set at 20 days and for this period the contractor was given an additional €100,000 to speed up the works.
The illegality took place before Konstantinos Yiorkadzis took over as President of the EDA and, according to the Auditor General, concerns:
-Assignment to a contractor, without tenders, for the construction of an additional floor and a warehouse
–The deal closed at €1.54 million, much closer to the contractor's requirements than with the estimated value and with a delivery time of 20 days.
– An on-site inspection found that while the contract for the construction of the floor was signed on 4.6.2024, the relevant works, one day later, i.e. on 5.6.2024, were almost completed
The above findings are recorded in a Report of the Audit Service which examined the accommodation of the newly established Development Licensing Directorate (AIA) of the Nicosia EDA.
In an introduction by the Auditor General, Mr. Andreas Papaconstantinou, it is mentioned that the initial plan provided that the housing needs would be covered through the former SL building (on Athalassas Avenue). For this purpose, the building was in the process of renovation. Suddenly (it is unclear exactly when the decision was taken) the initial plan is changed and it is decided to build an additional floor and a warehouse.
At that time, the Contracting Authority (AA) – formerly the Contracting Authority, invoked an urgent need and proceeded to negotiate, without publication, directly with the contractor who was carrying out the renovation work of the building. Under time pressure, the deal was "closed" in the amount of €1.54 million, much closer to the contractor's requirements than with the estimated value and with a delivery time of 20 days.
Due to the unrealistic implementation time, the Audit Office immediately carried out an on-site inspection. It was found that while the contract for the construction of the floor was signed on 4.6.2024, the relevant works, one day later, i.e. on 5.6.2024, were almost completed.
Due to poor planning, the Contracting Authority was forced to operate under very tight schedules and as a result the actions followed were not appropriate and/or legal.
Furthermore, the following are found:
-There was an invocation of Article 44(d) which is not justified, as the need for housing was foreseeable for the state since the start date of the EDCs was known two years earlier.
– The implementation of the project was allowed before the legalized procedures were followed, before a contract was signed, and without a prior economic impact study where other options would be evaluated.
–There was a concealment of actual data during the approvals, since the fact that the project was already in progress was not mentioned.
-The contractor had anticipated the assignment of the project (obviously received relevant assurances) so he proceeded to the implementation of the project before signing a contract.
-The negotiation between the Contracting Authority (CA) and the contractor took place under very unfavourable conditions for the CA and very favourable for the contractor.
–No competitive prices were secured – the cost of the project exceeded the estimated value by €200,000.
-An additional €100,000 was paid as an incentive to speed up the project, even though at the time of signing the contract the project was almost completed.
The need to add a floor arose when it was decided that the staff from 65 people initially estimated increased to 105. The contractor to whom the project was assigned was already in the building carrying out renovation works of €495,891 which were added to the €1.54 million of the additional floor, with the total amount (including extras) rising to €1,987,347 plus VAT.
The Report refers to an allegation by the former Nicosia Water Supply Board (Incorporated into the EDA) that the reversal of the original plan regarding the number of staff was made by the Ministry of the Interior and it is stated that the Audit Service has reservations as to whether this is the case.
It is also stated that the Contracting Authority had proceeded and allowed the start of development works and had put these projects into use, prior to the submission and issuance of the necessary development permits, in violation of the legislation.
The Audit Service also observes that a contractual implementation period of only 20 days was set for a project involving the construction of an additional floor and a warehouse, which did not reflect the actual data, since the Project was essentially almost complete at the time of signing the Contract. In addition, it was not possible to carry out works amounting to €1,544,455 within 20 days.
"Therefore", it is added, "most of the construction works were carried out by the contractor, before the necessary approvals were secured by the Board of Directors of the former WB and before the signing of the Contract with the Contractor".
At the same time, it is noted that "the differentiation of the initial planning for the temporary staffing of the newly established AIA of the Nicosia EDA, resulted in a quadrupling of the initially calculated costs, without this being accompanied by an economic impact study where any alternative options would be examined.
The Report leaves spikes for the general planning in view of the reform that followed and it is noted that this was known since March 2022, when the relevant legislation was passed.
Finally, it is mentioned that in this case there was a lack of transparency and unequal treatment between all potential economic operators that could bid for the Project, possibly with a lower price, as well as negotiation with the Contractor who potentially had much greater bargaining power.
