The European Public Prosecutor's Office has launched an investigation into the procedures followed in the agreement for the Vasiliko projects. It is reminded that the Audit Office report details the warnings about the decision to award the project to the consortium, with involved parties seemingly aware of the issues before any agreements were signed.

As Brief reports, in short, the Audit Report indicates that the current issues could have been avoided if different decisions had been made. From the initial stages, before the agreement, there were signs and indications of future problems with the project, enough to warrant reconsideration of awarding the contract.

Despite these reservations, the involved parties proceeded with the agreement, knowing that the EU might investigate legal violations and that there was a risk of losing the €101 million European grant.

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The Audit Office report mentions a meeting on November 22, 2019, under the former President of the Republic, Nicos Anastasiades, where the then Minister of Energy, Commerce, and Industry admitted that, given the likelihood of EU findings regarding public procurement law violations in the bid evaluation process, the €101 million funding from the EU should not be considered guaranteed. The then Minister of Finance stated that the project should proceed with Consortium D, even if it meant losing the €101 million grant from the EU.

Ultimately, while the project was deemed extremely important, it neither proceeded as planned nor continued without issues, with Cyprus continuing to pay emissions costs amounting to hundreds of millions of euros. Additionally, the EPPO has initiated an investigation into possible corruption and misappropriation of EU funds, with the possibility of demanding the return of millions of euros granted for the project.

According to the EPPO's announcement, the investigation concerns potential fraud in public contract agreements, corruption, and misuse of EU funds, as €101 million of the €542 million total cost was funded by the "Connecting Europe Facility" program.

The project was supposed to be completed by December 2019.

As mentioned earlier, the Audit Office warned that provisions were violated, which, according to its report, could have led to the consortium's exclusion from the process.

Specifically, the Audit Office's report highlights three points sufficient to exclude the consortium and halt the process:

1. Exclusion of a consortium member from public contracts

2. Issues with the evaluation of the technical offer

3. Problems with the performance bond, a substantial term of the agreement

The investigation into the LNG import terminal project in Vasilikos is currently being conducted by a three-member investigative team from the Economic Crime Division, under the supervision of the European Public Prosecutor’s Office (EPPO), said Police Spokesman Christos Andreou.

Speaking to the Cyprus News Agency, Mr. Andreou added that if the volume of investigative material suggests the need for reinforcement, the number of investigators will be increased.

He also stated that the investigative team has already received documents from the Audit Office.

Clarifying that the criminal investigation does not have a set timeframe, Mr. Andreou noted that the directive is to complete it as soon as possible.

Given that the investigation into potential criminal offenses is ongoing, and considering the related announcement by the EPPO, Cyprus Police will not disclose further details to avoid compromising the investigation, Mr. Andreou said.

The investigation began following instructions issued by the European Public Prosecutor’s Office.