The construction of the regasification terminal in Vasiliko on the southern coast of the Mediterranean island aims to reduce the country’s dependency on heavy fuel oil and diesel for electricity production. The alternative is natural gas, which, in liquid form delivered by ships, will provide cleaner and cheaper power for consumers.
The project was initially scheduled for completion in October 2022, but the Chinese-led consortium CPP-Metron, which won the tender, requested an extension and an additional 25 million euros due to higher steel prices. Despite objections from the country’s Audit Office, the government approved both requests.
However, the new deadline passed in July without the construction being completed. Additionally, the consortium requested another 200 million euros, which the Cyprus government did not approve, leading to a brief halt in works earlier this year.
Meanwhile, Cyprus’ Audit Office investigated the project and discovered several suspicious issues.
“As an independent agency, we audited the project and identified serious concerns regarding the management of public and European funds,” said audit officer Marios Petrides, who also serves as the agency's press spokesman.
Since this involves EU funds, the EPPO, which investigates and prosecutes crimes against the EU’s financial interests, had to be notified.
The EU decided to subsidize the project with 101 million euros after Cyprus’ repeated attempts to import natural gas failed. The European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) also agreed to finance the project.
The audit agency attributed responsibility to the government of former president Nicos Anastasiades, which ignored initial objections to the additional 25 million euros.
The report from the audit agency indicated irregularities concerning the approval of invoices, payments for completed works, and the approval of subcontractors by the board of the country’s natural gas infrastructure company, ETYFA.
Petrides declined to reveal the exact content of the 12-page letter sent to EPPO on Monday, but confirmed that it “obviously” contains concrete references to the role of politicians.
Approximately half of the onshore construction of the terminal has been completed, while the floating section, which involves a ship receiving liquid gas from tankers and regasifying it for transmission through pipelines to power plants, is nearing completion.
The consortium still insists on the additional 200 million euro, however.
“Provided that the parties can really work together, I believe that the main component of the project at Vasiliko can be completed by the end of this year or beginning of next year,” the Chinese Ambassador to Cyprus, Liu Yantao, said in March, according to Cyprus Mail.
