• A bill has been submitted to Parliament to enhance transparency in high-value public contracts without altering the EU framework.

• Contracting authorities will be required to publish bi-annual transparency reports, which will be shared with Parliament, the Auditor General, and the Treasury.

• Mandatory publication of details is established when a cost increase or time extension of at least 10% is identified during contract execution.

• The regulation exclusively concerns major projects, such as works contracts over €5 million and supply or service contracts over €140,000.

• The objective is stricter oversight of direct awards, which in Cyprus account for a quarter of all contracts.

Enhancing Public Accountability Without Altering EU Rules

A bill submitted to the House of Representatives by the President of ALMA, Odysseas Michaelides, provides for the enhancement of transparency and public accountability regarding major public contracts, without modifying the core award procedures stemming from EU law.

According to statements by the bill's sponsor to INK, the initiative seeks to bring transparency to direct contract awards, noting that EU legislation in this area cannot be altered even by a comma.

"We are introducing publicity elements to the issue of direct awards," he stated, noting that under EU law, direct awards should be used strictly by exception.

He pointed out that, based on Treasury data, one in four contracts in Cyprus is awarded via direct assignment and noted that his proposed bill provides for informing Parliament and the Auditor General about these tenders.

Additionally, he said the proposed regulation mandates reporting on project delays and cost overruns in directly awarded contracts.

Mr. Michaelides emphasized that the bill applies only to major projects. Specifically, under EU directives, the provisions cover works contracts over €5 million and service or supply contracts over €140,000.

What the Bill Entails

In detail, the purpose of the bill is to amend the law regulating procurement procedures for entities operating in the water, energy, transport, and postal services sectors and related matters, in order to strengthen transparency and public accountability regarding high-value public contracts.

The explanatory memorandum accompanying the bill notes that the proposal does not seek to alter participation terms, award procedures, selection or award criteria, exclusion grounds, or any other essential element of the public procurement process.

Instead, it introduces additional national disclosure and accountability requirements that operate complementarily to the existing public contract publishing and management system.

Under the proposed regulations, every contracting authority or entity executing major contracts, defined as public contracts whose initial value excluding VAT meets or exceeds the thresholds set out in Article 10 of the amended law, must publish a bi-annual transparency report on its official website.

Furthermore, the report will be sent to the Accountant General and communicated to the Auditor General and the Parliamentary Public Accounts Committee.

It is noted that selecting these specific thresholds ensures that the new obligation is restricted to contracts of significant economic value without needlessly overburdening small or routine public procurements.

This periodic form of accountability was chosen over the obligation to send separate updates for each individual event to prevent excessive bureaucracy.

At the same time, it allows Parliament, the Auditor General, the Accountant General, and citizens to maintain a consolidated picture of major public contract execution.

The bill also mandates disclosure when an approved or identified increase during contract execution reaches or exceeds 10% of the initial contract value, or when an extension reaches or exceeds 10% of the originally scheduled execution time.

Among other details, it is noted that increases or extensions are calculated cumulatively, regardless of whether they result from a formal modification, claim, additional payment, settlement, extension, or other act or decision by the contracting authority.

Procurement by the Numbers

Based on data obtained by INK from the Treasury of the Republic, a total of 9,545 contracts were awarded during the previous year and the first quarter of the current year, with a total value exceeding €1.8 billion.

Of these tenders, 747, with a total value of approximately €335 million, were direct contracts awarded through simplified procedures and without prior publication.

Total contracts awarded via open procedures in 2025 reached approximately €1.5 billion, or 69% of the total value of awarded contracts, while those awarded via simplified procedures without prior publication amounted to €277 million, or 13.01%.

Recent Statutory Threshold Revisions

It is worth noting that approximately one year ago, the legislation governing direct award thresholds was revised:

• Direct awards for works and supply contracts previously capped at €2,000, and service contracts capped at €5,000, were raised to €7,000.

• Contracts for works and supplies involving written or oral offers from a limited number of economic operators, previously capped at €15,000, were raised to €25,000 (aligning with service contracts).

• Contracts for works and supplies requiring offers from at least four economic operators, previously capped at €50,000, were raised to €80,000 (aligning with service contracts).

Concentration Among Major Contractors

Furthermore, an Audit Office report published in the previous year identified that out of 2,164 public contracts valued at €2.5 billion, 40.8% of total market contract value was concentrated among just three contractors.

Specifically:

• Cyfield accounted for 22.4%

• Iacovou accounted for 12.8%

• Cybarco accounted for 5.6%

Together, these three firms secured 13% of the total number of major contracts.

The report also noted that out of the 2,164 contracts, 1,734 were undertaken by small or individual contractors, indicating market fragmentation in smaller-scale projects.

Among other findings, participation by economic operators was judged to be satisfactory to limited, with 60.3% of tenders between 2021 and 2024 attracting at least three participants, while in 14.2% of cases, there was no competition at all.

Source: ink.com