TRADE, Industry and Tourism Minister George Lillikas yesterday unleashed a scathing attack against his predecessor concerning his handling of the controversial Larnaca refinery upgrade that the government recently decided to scrap after it transpired that it would save taxpayers around $86 million.
Former trade and industry minister Nicos Rolandis however rubbished the claims arguing that the upgrade would have fetched $60 million.
The government has decided to turn the refinery into a temporary fuel terminal for imports until an energy centre was constructed on the coast of Vassiliko.
But Lillikas came out with all guns blazing yesterday during a session of the House Trade Committee, which discussed the issue.
His outburst was prompted by a longwinded speech – 24 minutes and 16 seconds according to AKEL deputy Stavros Evagorou – by committee chairman, DISY deputy Lefteris Christoforou, who disputed the government’s decision to scrap the refinery upgrade, arguing it looked like it was only made to overturn the previous administration’s decision.
Christoforou added that the study that led to the decision was also suspicious since it was conducted in a very short time span and it contradicted three other studies done by the previous government.
Lillikas defended his ministry’s study, arguing that it had the input of all involved parties including the refinery.
He said previous studies never looked into the issue from the same angle. He added it was not a very complicated study to conduct, hence the short time needed to carry it out.
The minister said the current government’s studies were done with the utmost transparency and challenged anyone to speak out if they were influenced in any way to favour the fuel terminal option.
Lillikas charged Rolandis of trying to avoid scrutiny from the House by not asking for government guarantees on a loan to upgrade the refinery. The government has to go through the House for approval every time they wanted to guarantee a loan.
“Why did Rolandis want a loan without guarantees and why did he avoid the House?” Lillikas said.
The minister also charged the cabinet had been misled when taking the decision to upgrade the refinery. And he questioned the conditions of the loan to pay for the upgrade – 1.25 per cent flat interest on around €54 million – when the Central Bank secured one in 24 hours for 0.45 per cent.
“Why was the Central Bank bypassed,” Lillikas said.
He went on to say everyone apart from Rolandis doubted the viability of the refinery.
Lillikas claimed the previous government broke the law when it signed the contract with an Iranian company to upgrade the refinery, but would not disclose further detail on the matter.
“From the day the study was published, no one has spoken in favour of upgrade apart from Mr. Rolandis,” Lillikas said.
Rolandis rejected the accusations, arguing that the cabinet had been fully aware of what was going on.
“The cabinet was fully informed about the upgrade when it took its decision and all studies of Cypriot and foreign experts indicated that the upgrade would have given benefits in the region of $60 million,” Rolandis said.
He counter charged that the study done by the current government was haphazard and contained “many mistakes, omissions, unfounded assumptions and admissions and constitutes a very damaging option”.
Concerning the loan, Rolandis said his ministry had nothing to do with its conditions, pointing out it was the job of the finance ministry to handle such matters.
“This concerns the finance ministry exclusively and this is provided for in the cabinet decision,” the former minister told the Cyprus Mail.
Rolandis said at that stage there was no government guarantee but only a letter of comfort.
“When you go to bank to get a loan and you only give a letter of comfort, the interest is always higher.
“When you give government guarantee the interest is lower,” Rolandis said.
He said that the guarantee issue did not concern his ministry and it was the finance minister who had been authorised by the cabinet to sign the guarantee and submit the bill to the House.
“Anything having to do with the loan, government guarantee and letter of comfort concerns the finance minister,” Rolandis said.
He said the decision to upgrade to refinery was taken eight years ago – before he was minister — but the reason for the delay was the Larnaca municipality’s refusal to allow it to go ahead.
