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A construction project meant to modernize part of Cyprus’ local government system is under fire after the Auditor General uncovered a series of irregularities, from bypassing public tenders to starting work without building permits or signed contracts.
At the heart of the issue, according to Kathimerini's Apostolos Tomaras, is a €1.5 million contract awarded directly (and without competition) for renovation work at the former Nicosia Water Supply Council (SYL) building. The project was part of a wider effort to accommodate the Development Licensing Directorate under newly restructured local government bodies.
But according to a damning report from the Auditor General, rules were bent, and in some cases, outright ignored, to push the project through quickly.
But according to a damning report from the Auditor General, rules were bent, and in some cases, outright ignored, to push the project through quickly.
Permits filed after work began
The report reveals that the contractor started construction well before securing the required town planning and building permits. In fact, the permit application was only filed in April 2024, nearly a month after renovation work had already begun.
Not only were the rules sidestepped, but the building was already in use before the necessary approvals had even been submitted. This, the report states, violates Cyprus’ urban planning and building laws.
Contracts signed after construction started
Perhaps even more concerning is that work began before the project was formally approved or a contract signed. According to the timeline, construction of an additional floor and warehouse was well underway by early June, while official approval for a no-bid contract was only given on June 3. The contract was signed the following day, June 4, when the project was already near completion.
The contracting authority claimed the contractor had taken the initiative at its own risk. But the Auditor General rejected this explanation, noting there was no written agreement or go-ahead that would justify such a move.
Legal loopholes and rising costs
The authority in charge defended its actions by invoking Article 44(d) of Law N.140(I)/2016, which allows for direct awards in cases of unforeseen and urgent need. However, the Auditor General cast doubt on whether this clause was genuinely applicable.
The final contract amount also raised eyebrows. At €1.54 million (excluding VAT), the cost was around €200,000 higher than initially budgeted. The report suggests the contractor held all the cards during negotiations, given that the work was already well underway by the time formal talks occurred.
Fast-track fees and missing impact study
In a rush to wrap up the project, the contracting authority also agreed to pay a €100,000 “fast-track” fee, about 6% of the project’s cost, even though construction was nearly finished when the contract was signed. An additional €7,700 was paid to consulting engineers for design and supervision, again citing the need for speed.
But no economic impact study was conducted to justify any of these added expenses. The Auditor General also highlighted a fourfold increase in the estimated cost of housing the Development Licensing Directorate compared to the original projection.
A pattern, not an exception
This isn’t an isolated incident. The Auditor General warns that public projects across Cyprus are increasingly bypassing competitive bidding processes, often under the same legal pretext of urgency.
The report paints a troubling picture of how public sector projects are managed, raising questions about transparency, accountability, and the responsible use of taxpayer money.
