EAC worried over Vassilikos insurance

THE ELECTRICITY authority (EAC) will face real problems if insurance companies fail to compensate the organisation for the extensive damage caused to the main power station by the July 11 naval base blast, its chairman said yesterday.

But in the event the insurance does not pay up, the EAC will claim compensation from elsewhere, chairman Harris Thrassou said, without clarifying further.

The Evangelos Florakis naval base blast killed 13 people and caused extensive damage to the Vassilikos power plant, causing rolling power cuts island-wide for around a month.

The authority was forced to import generators and buy power from Turkish Cypriots – through a private businessman – in a bid to meet demand.

The loss in revenues from the destruction and the cost of leasing the generators and buying power have caused a liquidity problem for the EAC.

According to Thrassou, the problem will continue until the EAC returns to normal – something expected in 2013 and provided the insurance covers the damage.

Thrassou said the Vassilikos plant’s units four and five – with an output of 450 MW — should be put into operation in 2012, allowing the organisation to return to financial normalcy a year later.

“Provided that the insurance companies cover the damage,” Thrassou told the Cyprus News Agency. “If the insurance companies for not cover us, then we will have a real problem.”

Asked if they will face viability problems if the insurers do not pay up, Thrassou said the EAC will seek compensation from elsewhere, depending on the advice of their lawyers.

The insurer’s decision is expected early next month.

The cost of the damage to the plant appears to be around half of earlier estimates, which put it at around €700 million.

And the EAC is cutting spending beyond the threshold requested by the finance ministry, Thrassou said.

He said the organisation saved more than the 5.0 per cent requested by the ministry in 2010 and similar savings will be made in 2011.

 

 

 

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.