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15 June, 2024
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Approval of additional budget at risk due to parking problems

Insufficient parking spaces cause debate during budget discussions

Panayiotis Rougalas

Panayiotis Rougalas

The approval of the first supplementary budget for 2023, amounting to 361 million euros, may face obstacles due to the lack of adequate parking spaces at the new Ministry of Labor building.

During the discussion of the supplementary budget of 361 million euros, criticism was directed towards the choice of the "Metropolitan" building in the center of Nicosia to house the new Ministry of Labor and the Social Insurance Services, primarily due to the insufficient parking spaces. Currently, the building has only 47 available parking spaces, and an additional 15 spaces have been selected within a 300-meter distance in a building on Stasicratous Street.

Out of the requested amount of 361 million euros from the Parliamentary Committee on Finance, 25.4 million euros will be used to cover the cost of acquiring the property on which the "Metropolitan" building has been constructed. According to a representative from the Ministry of Finance, on December 14, 2022, the Republic of Cyprus entered into a purchase agreement for the property for a total of 21.3 million euros, plus VAT. The purchase agreement, as communicated by the Ministry of Finance, was made with the condition of issuing a separate title of ownership within a timeframe of 12 months from the date of the agreement. The seller of the property, in a letter dated May 17, 2023, informed the Ministry of Finance about the fulfillment of this condition and sent a copy of the separate title of ownership for the "property after separation."

According to the payment terms of the agreement, a down payment of 30%, which amounts to 6.3 million euros plus VAT, is payable to the seller within 30 days from the date the seller informs the buyer about the fulfillment of the condition, i.e., starting from May 17, 2023. However, the seller is required to provide the buyer with a bank guarantee of 6.3 million euros as an advance payment.

Subsequently, after receiving the bank guarantee from the seller in the amount of 7.6 million euros (6.3 million euros plus VAT), the buyer made the down payment on June 14, 2023, as the contractual obligation of the Republic according to the purchase agreement.

According to the terms of the purchase agreement as presented in Parliament, the remaining 70% of the total selling price, amounting to 14.9 million euros plus VAT, becomes payable within 5 days from the date of property transfer. During the payment of the 14.9 million euros plus VAT, the seller will be required to provide a bank guarantee of 3.1 million euros (15% of the total price), which will cover the liability period for defects, lasting 25 months. Additionally, the seller must provide a performance bond of 10% of the total selling price for the obligation to issue a certificate of issuance.

The bank guarantee covers the liability period for defects in the purchase and the seller's obligation to secure additional parking spaces at their own expense, as determined by the competent licensing authority, namely the Nicosia Municipality, which should not be more than 300 meters away from the Ministry of Labor building. The contract includes the seller's obligation to provide a corresponding number of temporary parking spaces until permanent spaces are found. If the seller fails to comply, the contract states that the buyer, i.e., the state, has the right to take legal action.

[This article was translated from its Greek original]

Cyprus  |  parking  |  space  |  budget

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