EU to scrutinize Vasiliko energy project
The procedures and decisions related to Cyprus’ largest energy project at Vasilikos are gaining significant attention. According to information from the country’s Audit Office, a file is being prepared for a complaint with the European Public Prosecutor’s Office (EPPO).
Kathimerini understands the file will be submitted to the EPPO around mid-March, and the complaint will concern the events preceding the project’s award to a Chinese consortium and the circumstances under which the Anastasiades government decided to grant the project to the Chinese.
Competent sources indicate that the file includes the memorandum of the independent Cyprus Hydrocarbons Association to the Parliament dated February 14. The content of the memorandum is assessed as serious, providing insight into events from 2016 until the announcement of the tender results. The file claims to contain other evidence potentially substantiating concerns about the procedures followed by the Anastasiades government, which has created numerous problems, risking the project’s completion by the contractor consortium. If a complaint is made to the European Public Prosecutor’s Office, investigations will be launched to clarify whether irregularities occurred in a project for which the Republic of Cyprus received 110 million euros in funding from the European Commission and a €150 million loan from the European Investment Bank with state guarantees.
The memo argues that the Anastasiades government chose the most expensive, complex and time-consuming option among four terminal proposals. It decided to build a complex and costly platform (Jetty), disregarding consultants’ instructions for separate contracts and tenders. This decision derailed the consultants’ philosophy, ultimately involving converting an old vessel into an FSRU, building a 1.5-kilometer platform, and operating the terminal under one bid, justifying it as crucial for EU grant retention and being under the PCI (Project of Common Interest) heading.
As evidenced by the memorandum, the government commissioned an international consultancy firm (Gaffney Cline & Associates) to prepare a study on the methodology for introducing VAT. The Cyprus Hydrocarbons Association argues that the government did not consider the study, costing €250,000.
