THE COMMUNICATIONS Ministry yesterday played down fears that key development projects would be axed as part of measures to rein in the rising public deficit.
A ministry announcement said reports doing the rounds on certain projects that the government plans to put in the deep freeze were inaccurate. The ministry highlighted that “the works will be prioritised and promoted based on the developmental and social benefit they afford”.
“The Nicosia Oncology Ward not only did not get put in the freezer, as the Ecologists’ Movement announced, but on August 6, 2009, the contract for its construction was signed at a cost of €1,022,000 plus VAT while the duration of the work will be 42 weeks (around ten months),” said the announcement.
Communications Minister Nicos Nicolaides already announced that a number of development and infrastructure projects would be put on hold to curb the upward trend of the public deficit. The government has experienced a substantial decrease in revenue since the global crisis hit Cyprus, mainly following the huge drop in property sales. Government thinking is that curbing public expenditure might help offset the falling revenue enough to keep the public deficit within EU-accepted limits.
“In this spirit, at the last meeting of the Cabinet, the creation of a three-member ministerial committee was decided, comprised of the Ministers of Finance, Communications and Health, which will evaluate the various development projects based on the principles referred to above and taking into consideration all economic factors,” said the ministry.
Opposition party DISY’s Nicos Tornaritis criticised the decision to hold back “major development and infrastructure projects…for an unknown period of time”.
The deputy said his party had warned the government a year to review its budget and priorities in light of the serious financial crisis it was facing, something which he claimed did not happen.
Tornaritis argued that certain far-reaching projects should not be shelved and forgotten, referring specifically to plans to build a new museum, the Paphos-Polis highway and the Cyprus Cultural Centre.
“Cyprus will hold the EU Presidency in two years. Where will we host our European partners?” he asked.
According to yesterday’s Politis, the ministerial committee will decide which public works projects will be put on ice and for how long in the very near future. The Finance Ministry is reportedly trying to suspend bidding procedures for projects worth half a billion euro.
The ministry reportedly hopes to stop €350m going out of state coffers in the next one to three years from the Communications Ministry projects alone, while another €150m is hoped to be saved by cutting or postponing projects planned by the other ministries.
The paper cited sources saying that likely projects consigned to the deep freeze were: the new parliament building on PASYDY hill (estimated cost €110m); Culture Centre (€100m); Archaeological Museum at old Nicosia hospital (€80m); building to house Communications Ministry and post office (€35m); expansion of Public Works buildings on Strovolos Avenue (€12m); and the Limassol Oncology Centre (€25m).
