THE Supreme Court has declared null and void the controversial awarding of a £1 million euro information contract to a joint venture.
The public tender was late last year awarded to Action PR & Publications Ltd and Epistle, who were to carry out the advertising end of the Finance Ministry’s information campaign on the euro.
The Advertising Agencies Association (AAA) protested, but days later the Tenders Review Board upheld the awarding of the contract.
According to the AAA, Epistle is not a bona fide advertising agency in the first place, and its articles of association explicitly prohibit the company from operating in Cyprus.
The AAA had threatened to boycott all public tenders until authorities took steps to introduce transparency in tenders procedures.
As well as getting the euro information campaign, Epistle had recently been awarded an £8 million contract by the Cyprus Tourism Organisation.
Reportedly a company bought off the shelf, Epistle was formerly an offshore venture known as Wextel Communication, which dealt in satellite dishes before 2003 when it changed name.
Reacting to its portrayal by the AAA as a “phantom company”, Epistle said that the other agencies were upset because they had lost. The company said it was simply offering a better deal to the government, and that it had nothing to hide.
The turnover of the local ad industry is around £50 million, 85 per cent of which is handled by AAA members.
Epistle is not part of the AAA, leading some to speculate that the association was annoyed for having lost to an “outsider”.
In its decision, the Supreme Court found that the Tenders Review Board was wrong to uphold the awarding of the campaign to the joint venture, one of whose members – Epistle – was not entitled to conduct advertising business in Cyprus.
And it said the board was “misled” as to Epistle’s capacity to undertake the contract.
Action’s CEO Toni Christodoulou called the outcome “unfair”, since clearly the Finance Ministry had previously decided that their offer was the best.
Actual profits from the £1 million contract would have amounted to just £85,000, he added.
“Our lawyers our handling the case,” added Christodoulou, but declined to comment further.
The euro information campaign is intended to educate industry leaders but also the broader public on the transition to the new currency.
Cyprus will switch to the euro on January 1, 2008, leaving little if any room for delays in implementing an awareness programme.
But the Finance Ministry insisted yesterday there was no cause for concern. Andreas Charalambous, Director of Economic Planning at the ministry, told the Mail the Supreme Court’s decision did not necessarily mean scrapping the tender and beginning from scratch.
“We shall of course comply with the court’s decision, but we will not change our goals. We might have to adjust our schedule, though,” he offered.
The AAA could not be reached for comment.
n Information on the National Changeover Plan for the adoption of the euro can be found on the Finance Ministry’s website at:
http://www.euro.cy/euro/euro.nsf/dmlindex_en/dmlindex_en?opendocument
