THE GOVERNMENT deliberately ran the Philoxenia hotel into the ground in order to excuse selling it off, opposition deputy Kikis Kazamias claimed yesterday.
The House finance committee also heard yesterday that the Attorney-general had decided to order an investigation into allegations of scandalous goings on and mismanagement at the loss-making state-owned hotel.
The Akel deputy told the committee both the government and the hotel board were guilty of “criminal” neglect of the Philoxenia.
Commerce Minister Nicos Rolandis told deputies nothing could be further from the truth.
“I don’t think anyone would try to destroy a company, making it impossible to sell. If, on the other hand, the government’s intention was, as indeed it is, to get out of hotels then we had to do our utmost to make the hotel profitable so as to get the maximum price for it,” he said.
The cabinet has already decided to close down the Philoxenia in Nicosia and seek someone to run it, or use it to house a ministry if no one is found to take over. The government is also seeking to offload all or part of its stake in the Nicosia Hilton.
Kazamias repeated the corruption claims that are already the subject for an investigation by the Auditor-general’s office.
The allegations are that relatives of hotel staff held weddings there for free; that mukhtars and other used its rooms for sex romps with mistresses and girlfriends; and that the hotel board – nicknamed the “Services Committee” – grew to its 10-member size due to party nepotism.
Other claims are that £200,000 was wasted on renovation plans that were never used; that the bill for renovations grew from £300,000 to £900,000, with a 50 per cent cost overrun for other renovations raising the final cost to £1.5 million.
Kazamias also said the cabinet had decided as long ago as 1992 that the Philoxenia should be upgraded but plans had never got off the drawing board.
Rolandis said the persistent Philoxenia “scandal” reports had prompted Attorney-general Alecos Markides to order criminal investigators to probe the hotel’s affairs.
The minister also said the Philoxenia was simply not viable under its current management structure. “Seventy-two per cent of the hotel’s income goes on the wage bill and it would need £ 2 million in renovations to allow it to continue functioning,” he said.
Diko deputy Tassos Papadopoulos protested that the Philoxenia had never been meant to be a profit-making concern, “not even in centuries.” The hotel had been created as a training centre for hotel workers, he said. Where would trainee hotel waiters and porters learn their trade after the Philoxenia closed down, Papadopoulos wondered.
