Our View: Public to bear financial burden of government missteps

A divorce settlement is being negotiated between Natural Gas Infrastructure Company (Etyfa) and the CPP-Metron Consortium (CMC) which had the contract for the creation of an LNG terminal in Vassiliko. In the end it appeared impossible for the two sides to bridge the differences which developed over the project, despite the intervention of the president of the republic and the ambassador of China, not to mention the efforts of the Energy Minister George Papanastasiou to find a way forward.

Earlier this week, Papanastasiou revealed that Etyfa and CMC were involved in tough negotiations to find a mutually acceptable way of terminating the contract. The Floating Storage Regasification Unit (FSRU), which remains in Shanghai, is ready as an LNG carrier and will be delivered to Cyprus in the state it is currently in, said the minister, explaining that it must dock at an input terminal for checks on whether it is operating within specifications. So, we might have the floating unit here, but it will have to wait for the gas terminal to be completed before it can be put into operation.

CMC appears to be keeping the FSRU as a hostage and would send it to Cyprus once the termination agreement is finalised. Papanastasiou is confident that when there is an agreement on the FSRU, the two other parts of the contract – the jetty and the land terminal which are 60 per cent ready – could be completed by other contractors. How long it would take he did not say, nor had he mentioned what the cost of the aborted contract would be to the taxpayer.

We believe the public has every right to know what this disastrous enterprise, signed off by the previous government, at the behest of then president Nicos Anastasiades, will have cost the taxpayer. It was described as the biggest ever energy project, estimated to cost €300m, that was awarded without competitive tendering to a consortium with no experience in building LNG terminals. It was a scandal of epic proportions for which nobody has been held accountable – neither Anastasiades, nor his energy minister Giorgos Lakkotrypis, nor the president of Defa, at the time Symeon Kasianides.

There had been warnings, a report by the auditor-general highlighting the risks of awarding the contract to a single bidder without experience in building LNG terminals. Cheaper alternatives had been offered, but were ignored by the government, as were articles in the international press. We need to know what the cost of these indefensible, whimsical decisions, against all rational advice taken by Anastasiades and his sidekicks will be. How many tens of millions of euros have been wasted on a contract that no responsible government that prioritized the public interest would have sanctioned, let alone pushed for against all logic.

Once again, it is the people who will pick up the bill for Anastasiades’ scandalous irresponsibility. Not only will there be a big cost for the termination of the contract, but the delay in completing a project would mean households will carry on paying extremely high electricity bills.