Our View: Better the troika monitors gas fund than the government

COMMERCE Minister Neoclis Sylikiotis has come to exemplify the arrogance and autocratic style of the outgoing government. Like his president, he believes he is the arbiter of the country’s best interests and anyone who questions his decisions is dismissed as an enemy of the state. On Wednesday, he publicly laid into his ministerial colleague Vasos Shiarly and finance ministry officials whom he accused of failing to deal with the troika seriously. On Friday he accused opposition politicians of being in cahoots with the troika in order to hurt the country.
The reason for his outbursts was the finance ministry’s failure to inform him that the troika had written to it asking that the bill for the establishment of a National Fund for Hydrocarbons be put on hold. The troika wanted the bill blocked until it could have consultations with government because it believed some of the provisions were in violation of the memorandum of understanding. Its main objections were that the fund was not “based on a solid legal base and governance structure, drawing on internationally recognised best practices” that would ensure transparency, accountability and effectiveness.
Under the preliminary agreement with the troika, the government was expected to “prepare and adopt legal steps enabling the establishment of a resource fund, which should receive and manage the public revenues of offshore gas exploitation.” But first it had to “undertake a study on the financial aspects of the transition towards the exploitation, use and export of natural gas, as a first step in the formulation of a comprehensive development plan for the re-arrangement of the Cypriot energy sector.”
None of this was done by Sylikiotis, but the commerce ministry prepared a bill for the resource fund, which was sent to the troika by the finance ministry, as it was obliged to do under the preliminary bailout agreement. The troika informed the finance ministry of its objections and its demand for additional consultations. This put paid to the plans of Sylikiotis who was unable to suppress his anger once he found out what had happened.
Sylikiotis, as if to emphasise the government’s lack of trustworthiness, insisted that Shiarly should have simply briefed the troika about the resource fund bill, but not entered into consultations with it. He claimed, misleadingly, the memorandum did not stipulate that the agreement of the troika was required for any bills regarding natural gas. He also made out that passing bills, without consulting the troika, was a matter of national sovereignty.
But why is Sylikiotis in such a rush to have the bill for the establishment of the national fund for hydrocarbons approved? He claimed that this would enable us to collect €200 million in signing on bonuses for the fund, from the companies that were awarded exploration rights in the second round of licensing. If the money was paid after the signing of the memorandum of understanding it would go towards the debt rather than the fund which, supposedly, needed to start spending on infrastructural work. How peculiar that the government which has delayed every important decision it had to take, regardless of the negative consequences of its procrastination, has found a sense of urgency, a month before it is set to step down.
Why the mad rush to collect the €200 million before it steps down? How honourable is it for the government to go out of its way to try to cheat our lenders, who will loan us €17 billion, by secretly passing the bill? This is nothing more than small-time shabbiness, which at least the finance minister, to his credit, refused to be a party to.
The fact is that the AKEL government has been desperate to collect the signing-on fees. When the second licensing round was announced last year, Sylikiotis had assured everyone, that there would be no time to assess the tenders and that the contracts would be signed by the next government. Not only did the AKEL government assess the applications, it is eager to sign the contracts and collect the signing-on fees before it leaves office, hence the big hurry to establish the resource fund. A fund before the detailed action plan for energy was formulated and submitted to the troika, as agreed, in the second quarter of this year, makes no sense.
All we can say is that the troika’s intervention should be welcomed and the taxpayer should not see the provisions of the memorandum about hydrocarbons as a violation of sovereignty. On the contrary, giving the technocrats of the troika a big say in the drafting of the plan for hydrocarbons is an excellent idea. They can be relied to put in place the right legal and political framework for the rational management of hydrocarbons. We cannot say the same for Sylikiotis and the government.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.