The alarming risks to Cyprus’s public finances stemming from delays in the non-implementation of the Vasilikos natural gas terminal are being increasingly confirmed, with taxpayers facing the prospect of shouldering costs amounting to billions of euros.

The figures related to the financial burden on the state—and ultimately on taxpayers—are staggering, based on what was presented yesterday before the Parliamentary Energy Committee.

AKEL Secretary General Stefanos Stefanou referred to a “billion-euro bomb,” underscoring the scale of the problem resulting from the failure to complete the project.

Members of parliament pointed out that a lawsuit is currently pending before international courts against the Republic of Cyprus by the Chinese company that had undertaken the project, which is claiming compensation of approximately €136 million.

The European Commission has already asked the Cypriot government to return the €67 million grant it had provided for the implementation of the project.

At the same time, the Commission has initiated a criminal investigation into the possible commission of criminal offences by ETYFA, the Chinese consortium CPP, and other parties involved, in connection with the execution of the public contract for the study, construction, and maintenance of the terminal.

The tender was launched in October 2018, with a total value exceeding €500 million, and was awarded to CPP in August 2019.

To date, €200 million has been paid, yet the project remains incomplete, despite official assurances to the contrary.

Members of the Committee also referred to expenditure of €10 million, which, according to them, αφορά legal and technical consultants involved in the project.

In addition, and as previously reported by Brief, the competent energy authorities have secured loans of approximately €250 million for the overall project, backed by state guarantees.

With regard to the much-discussed vessel Prometheus, Committee members asked whether the relevant works at Vasilikos have indeed been completed, as previously claimed by former Energy Minister Giorgos Papanastasiou.

They also requested information on when the vessel is expected to arrive in Cyprus, as well as the financial cost of its prolonged stay in Malaysia.

Some MPs expressed the view that the vessel could be leased until works at Vasilikos are completed, in order to reduce costs for the state.

Energy Minister Michalis Damianou undertook to convey all the questions raised to the relevant technocrats and provide answers.

DISY MP Averof Neofytou, addressing Minister Damianou, asked among other things whether he shares the position of his predecessor, Giorgos Papanastasiou, that “legal advisers are having a party.”

The issue of legal advisers’ fees brought to light a special report by the Audit Office, according to which the state has paid or will pay very substantial amounts.

Yesterday’s session of the Parliamentary Energy Committee was marked by strong statements and criticism from MPs directed at the government.

Among other things, detailed data were requested regarding the total cost of the project and its completion timeline.

Committee members also asked to be informed about the findings of the techno-economic study conducted by the French firm Technip.

It is noted that the study was recently delivered to ETYFA and the Ministry of Energy, with the aim of providing a way forward for the competent authorities to advance the project.

The Minister of Energy and his associates were also asked when a new tender is expected to be launched and whether a relevant timetable has been set.

Some MPs sought clarification on whether the current technical advisers of the project are also representing the Republic of Cyprus in the arbitration proceedings currently under way before the British courts.

ETYFA Chairman Giorgos Assiikalas cited confidentiality concerns regarding the disclosure of information, explaining that arbitration proceedings are ongoing before a UK court and that he was therefore unable to provide specific details.

In an intervention on the matter, Minister Damianou stated that the information could be provided, but reserved the right to respond comprehensively to all questions at a forthcoming session of the Committee.

Specifically regarding the cost of the project, he limited himself to saying that this would become clear with the launch of a new tender for the completion of the terminal.

AKEL Secretary General Stefanos Stefanou once again described the project as a “time bomb” which, as he argued, could exceed one billion euros.

He characterised it as “a scandal and the product of a bad agreement.”

He further expressed the view that the cost of the delay in implementing the project is borne by consumers, “who are forced every year to pay millions of euros in emissions costs.”

Finally, the AKEL Secretary General asked the Minister of Energy to provide information on the legality of a private power generation station that will operate in close proximity to the Vasilikos terminal.