The management of public moneys continues to be beset by “malaise”, auditor-general Odysseas Michaelides said on Tuesday handing his report for the year 2018 to President Nicos Anastasiades.
“There is still a great deal of room for improvement when it comes to managing the public purse,” Michaelides told reporters following the meeting at the presidential palace.
He cited issues relating to the shuttering of the cooperative bank in 2018 as well as question marks over the handling of public contracts pointing to waste.
For his part, Anastasiades thanked the Audit Office for its diligent work, but also appeared to take a dig at Michaelides, seen by critics as being too fastidious.
“Strict adherence to regulations, even though rules must be followed, can sometimes be damaging to the public interest,” the president said.
It’s understood Anastasiades was alluding to a difference in opinion with the auditor-general over whether a tender for the construction of an LNG import terminal should be green-lit or not.
In November, Michaelides recommended that the consortium selected for the contract should have been excluded from the outset because one of the participants in the consortium is a company linked to an entity implicated in a waste treatment scandal.
It would have meant scrapping the tender process altogether.
However the official was overruled by Anastasiades, who deemed that the project is in the national interest.
Taking questions from the press, Michaelides said his agency is finalising a report into the use by the presidency of a private jet to travel to New York for the UN General Assembly last September.
Reports at the time said the jet, a Boeing 737 800, was permanently stationed at Larnaca airport and belonged to Saudi interests.
Questions were raised as to whether the presidency shops around for the best bargain for air travel, or whether it has a standing arrangement with the Saudi businessman and owner of the jet.
Michaelides said he is expecting the presidency’s remarks – as per procedure – on the matter by January 15. After that, it would take the Audit Office a few more days to finalise the report.
The dossier would be made public by the end of the month.
One of the highlights of the Audit Office’s 2018 report is that state revenues in arrears came to €2.656 billion, of which €2.07 billion (or 76 per cent) related to the Tax Department.
The auditor-general also flagged aspects of the concession agreement between the government and Hermes, operator of the airports at Larnaca and Paphos.
Each year Hermes must pay the state a concession fee.
But the consortium held back €30 million for the years 2015-2017, arguing that it is owed this amount by the state as compensation for business lost due to the operation of the Tymbou (Ercan) airport in the north of the island.
The two sides subsequently reached a preliminary compromise deal where the state would compensate Hermes to the tune of €23 million over Tymbou airport.
In the view of the Audit Office, however, Hermes should be entitled to far less because it doesn’t factor in the fact that Hermes itself profits from passengers using Larnaca and Paphos airports and ending up holidaying in the north.
Elsewhere in its report, the Audit Office said the state is likely being short-changed in terms of the concession fee paid to it by the private concern which operates the cargo terminal at Limassol harbour.
Under the agreement, the licence holders are to pay the state an annual fixed concession fee of €7 million, plus a variable concession fee on their gross revenues.
The issue is that the Project Team tasked with collecting the concession fee relies on data from the concessionaire’s own computer system.
