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The Cyprus government has formally terminated its contract with Intrakat, a Greek construction company, for the long-awaited Paphos-Polis Chrysochous motorway, citing severe delays and excessive demands from the contractor, according to a report by Kathimerini's Dorita Yiannakou. After 2.5 years of stalled progress on Phase 1 of the project, the Ministry of Transport has opted to start from scratch, pledging to issue a new tender and complete the highway within three years.
The project, which involves building a 15.5-kilometer stretch from Agia Marinouda to Stroumbi, is seen as crucial for regional connectivity. The government’s decision to end its agreement with Intrakat, however, opens up fresh logistical and financial challenges, including compensation claims and a re-bidding process expected to cause further delays. The department has tasked itself with documenting completed and pending work to prepare new contracts and cost estimates for the remaining project phases.
In a press conference, Intrakat’s CEO Alexandros Exarchou defended the company's performance, blaming project delays on factors beyond its control, including a lack of suitable land for waste disposal, inadequate quarry resources for construction materials, and government inaction on flagged issues. Exarchou stated that Intrakat will contest the contract termination, arguing it met all responsibilities and was unjustly denied necessary project modifications. Intrakat is reportedly seeking €35 million in damages and disputes claims that it requested a five-year extension, asserting it asked only for three.
The Ministry of Public Works, however, holds that Intrakat failed to meet the project timeline, even after multiple warnings and extensions. According to ministry officials, work slowed dramatically in April, with the site essentially abandoned by August. Intrakat, which only completed 21% of the agreed-upon work, also requested an additional €36.2 million, a demand the government has labeled as "unsubstantiated and excessive." An independent committee reviewed Intrakat's 11 claims for additional funds and time, ultimately rejecting them as baseless.
The dispute has sparked debate over Cyprus' capacity to manage large-scale infrastructure projects. Local leaders and Paphos MPs have criticized the government for failing to cut ties with Intrakat sooner, while ministry officials insist they adhered strictly to contract terms. The controversy highlights mounting pressure on authorities to streamline construction projects and avoid protracted disputes that impede public works progress.
As the ministry prepares to relaunch the project, it also contemplates fast-tracking the highway’s second phase, with a tender for Phase 2 expected in early 2026.
