INSURERS are set to pay out up to €600 million towards the reconstruction of the incapacitated Vassiliko power plant following the explosion at the Evangelos Florakis naval base on Monday.
Spokesman for Atlantic Insurance, Andreas Pirishis, told the Cyprus Mail: “We have every intention of covering the damages; our signature is on the policy.”
Cyprus based Atlantic Insurance hold a policy with the Electricity Authority of Cyprus (EAC) insuring the island’s power facilities for up to €1.86 billion – with a limited payout of €600 million per single incident. Originally costing €1 billion to construct, it is thought the cost of rebuilding could be double this figure.
Amid alleged estimates, EAC spokesman Costas Gavrielides warned: “It is far too early to accurately measure the cost of the damage.” Still unable to access the site for assessment, Gavrielides reiterated that huge damage had been sustained and it would be a matter of months before reconstruction could begin, or before power supplies could be normalised.
Despite conceding that the insurance claim was likely to be unprecedentedly large, Pirishis made the assurance that Atlantic has had the policy reinsured by several overseas companies, and that the process of preparing for the claim has “already begun.” “Our partners abroad [including in the UK and France] recognise their involvement and plan to organise the claim as soon as possible.” An additional policy is held in Cyprus by the EAC with Eurosure, covering ‘Unit Five’ one of the Vassilikos generators. Eurosure yesterday declined to comment on the matter.
A source confirmed that the authorities intend to seek additional support from the European Union (EU). Even given the €600 million insurance policy there would remain a deficit of €1.4 billion to meet the estimated price of rebuilding the stricken power facility, with the government seemingly unable to cover the cost alone.
Monetary aid can be accessed through the European Commission Solidarity Fund (ECSF), however it is likely to take several weeks to become available according to the EC’s Ambassador to Cyprus, Androulla Kaminara: “The government of the member state must submit a detailed dossier of damage claims to be processed by the Commission. The proposal is then submitted to the European Parliament for discussion before funds are released.”
The ECSF granted Cyprus €7.6 million in 2008 following a series of droughts, and paid as much as €400 million to the Italian government after an earthquake in 2009 killed 90. Reserved for “major disasters”, it remains unconfirmed whether this will be a viable avenue to finance reconstruction, although the EC criterion that the cost must exceed 0.6 per cent of gross national income (approx €16.5 billion) should be easily met.
Regarding the disruption to the electricity supply, the EAC confirmed that they are “looking at all possibilities” and are in the process of locating mobile generators from abroad. Immediate civil protection can be provided by other EU member states through the coordinating body the Monitoring and Information Centre (MIC). Kaminara informed the Cyprus Mail “The MIC will coordinate aid in the form of equipment and specialists,” with a government spokesman confirming that energy experts from Greece and France are already present on the ground.
