By Constantinos Psillides
AUDITOR-general Odysseas Michaelides has found evidence pointing to a possible misappropriation of funds by the Nicosia Sewerage Board (SAL) to the tune of €5m, according to a letter sent by his office to the SAL board last week and made public on Wednesday.
According to the letter, the SAL board reached a friendly settlement with the company that constructed the town’s sewerage system (the project began in 2006 and was completed in 2010) that was “especially burdensome for the board,” approving compensation for the company while ignoring a contract provision stipulating that the company should compensate the board for any damages caused by not completing the project on time.
The project had an original budget of around €10m but ended up costing €15m, due to the settlement.
The company requested compensation for work done 245 days after the project was supposed to be delivered, plus interest.
The Auditor-general’s office has found that in estimating the settlement amount the board completely ignored the contractual term saying that the cost of any delays should be footed by the company.
The board also appears to have ignored suggestions made by one of their engineers on estimating the amount paid to the company, adopting the contractor’s formula of calculating the due amount, “which cited outrageous claims and facts that had nothing to do with reality.”
The report said that the board didn’t challenge the claim made by the company and instead agreed to what was put in front of them.
The Auditor-general asked the board to justify a number of payments made to the construction company for additional work needed.
Specifically, SAL needs to justify, among others, a payment of €510,000 for overtime work on weekends – which was outside the specifications set by the tender – and €310, 000 paid for additional paving work.
SAL Chairman and Nicosia mayor Constantinos Yiorkadjis was elected in 2011, succeeding Eleni Mavrou who was in office from 2006. The rest of the board comprises of councillors from all municipalities in the greater Nicosia area; six from Nicosia, five from Strovolos, two from Aglantzia, two from Lakatamia, and one each from Agios Dometios, Engomi and Latsia.
The case is reminiscent of the recent Paphos Sewerage Board (SAPA) scandal, which saw former Paphos mayor Savvas Vergas and the board’s former general manager Eftychios Malekides sentenced to six years each on charges of corruption and misappropriation of funds. The two had forced construction companies to pay bribes in order to secure contracts and subsequently approved additional work so the contractors would get more money.
