The Significant and Trivial Aspects of Public Contract Failures
In the last six months, Cyprus may have set a historic record for canceled high-profile projects. Reforms in public contracting cannot wait any longer.
In June, following the troubled conclusion of the Larnaca Marina contract, I wrote that successive public contract failures require serious reflection by the government and should prompt radical reforms in the planning, awarding, supervision, and execution of public contracts in Cyprus.
In hindsight, I realize that article could have come later, as the months since have only added more evidence to support this stance, shedding further light on the government’s lack of urgency and preparedness in this critical sector.
Since then, we have seen the final collapse of the Vasilikos terminal scandal, the failure of the e-justice system, and new contract issues with the Paphos-Polis road and, just yesterday, the Liopetri fishing shelter.
Public finger-pointing and blame-shifting are often followed, debated, and criticized, but this communication game doesn’t serve the public interest. It certainly won’t compensate Cypriot taxpayers, who indirectly bear the cost of these failures in both time and money.
After all, the blame game in this case is an internal affair: many senior officials and key government members either served under the previous administration or were closely affiliated with it.
Are previous officials at fault for poor contract agreements, or is the current administration to blame for failing to monitor public contracts effectively, only acting when a contract is on the brink of collapse? Internal conflicts within the broader ‘family tree’ don’t require participation from third parties.
What does concern the public interest, however, are three very specific issues.
First, these failures must undergo exhaustive investigation by Cyprus’s judiciary. Only through transparency and a solid rule of law can trust between citizens and the state be strengthened. However, it’s evident that Cyprus will need to wait for reforms in the Legal Service to achieve this goal, as the current structure and leadership seem unable to fully exercise its constitutional role.
Second, the government’s tendency to prioritize short-term image wins often backfires in the long run. In Vasilikos, there were photo ops and promises of 150 Chinese workers who would come to complete the terminal; in Larnaca Marina, last-minute assurances of project “rescue” were given. The e-justice system saw repeated promises from the Digital Policy Ministry to resolve flaws in a so-called “digital revolution” within a week, then a month, then by 2024, only to end up scrapped. What’s needed is more action, fewer illusions, and more straightforward communication—a crucial element for restoring credibility in the political arena.
Third, and most importantly, the major issue—the “elephant in the room”—is the very legislation and processes governing public contracts. Reforms must be swift, structural, and innovative.
Cyprus’s current tender system prioritizes cost at the expense of essential factors like timely delivery and a contractor's ability to meet the project's demands. To bring public contracting up to modern standards, the selection criteria should be broadened to include quality standards and best practices of the 21st century. These criteria must be properly weighted, and oversight strengthened to address delays and issues as they arise. Moreover, efficient dispute resolution mechanisms are essential to ensure that conflicts don’t lead to protracted or incomplete projects.
In the last six months, Cyprus may have set a historic record for canceled high-profile projects. Reforms in public contracting cannot wait any longer.