Chinese to pull out of Vasilikos
Following the public admission by Energy Minister George Papanastasiou, a consensual separation between Cyprus’ Natural Gas Infrastructure Company (ETYFA) and China’s CPP-Metron Consortium Ltd is imminent. Official announcements are expected this week, as the minister will be briefed on Tuesday.
The coordinated exit of the Chinese consortium from the unfinished Vasilikos energy terminal has damaged the Republic of Cyprus’ image and will likely deter international companies from future projects. This issue adds to growing concerns following the failed Larnaca port redevelopment and highlights the shortcomings in the tender and award processes for large public works.
Before the government can correct these procedures, it must investigate why numerous flagship infrastructure projects either never started or were abandoned half-finished. It is already considering structural changes.
The agreed exit will lead to financial losses for Cyprus due to ongoing negotiations with the Chinese. This situation has also postponed the introduction of VAT, adding to the burden on state coffers.
