Auditor General blows whistle on Pissouri payouts

Auditor General Odysseas Michaelides is calling on the interior minister to seek a legal opinion before reaching a final decision on Pissouri payouts due to landslide problems.

According to local media, Michaelides wrote a letter last Friday warning Interior Minister Constantinos Petrides that paying compensation to homeowners to cover up mistakes of the past would be setting a bad precedent.

The warning comes one month following a House Interior Committee hearing, where an interior ministry official said experts viewed the active landslide in Pissouri as “not a local problem” and that government administration would soon be discussing payouts for homeowners who have been ordered to vacate their destroyed houses.

As a result of slow-moving land slippage, which first appeared in 2012 in the area, dozens of homes have been destroyed with cracks on the walls, broken pipes, damaged drains, road failures and many other infrastructure problems. The number recently jumped to 240 according to recent figures, while half of those homes are considered to have serious damage not covered by home insurance plans.

Local residents blame authorities for failing to carry out proper infrastructure works, while local government officials have in the past pointed fingers at private developers for going carrying out business as usual despite knowing high water table areas had been filled with debris without a proper management of the geological infrastructure.

Government officials have been dismissing for a number of years a private study that concluded the problem ought to be declared a natural disaster, a description which would have meant all people affected will be entitled to compensation.

The administration has been signalling recently that it was ready to find a solution and put this problem to rest.

But the auditor general says issuing payouts to affected homeowners would be a free “bonus” to developers who sold plots to unsuspecting buyers.

“The matter is of particular importance for the fact that a possible decision in favour of compensation for the affected owners would essentially be a bonus for the developers,” Michaelides said in his letter, adding that a specific and well known real estate developer would be off the hook if such a decision is taken.

The auditor general also cited a law that made clear developers were ultimately responsible for commissioning their own static surveys using their own civil engineers. He also added that when “local authorities carry out an inspection, this does not relieve the developers from responsibility for the calculations for which they themselves sign on the dotted line.”

Michaelides also posed a hypothetical question in his letter, asking the minister what would happen in cases where there are victims and lawsuits.

“Are we to think from now on that employees in local districts will bear responsibility for the correctness and adequacy of hundreds of static surveys that pass through their desk every year?”

So far, four families have been formally ordered to vacate and abandon their homes, while more households are expected to receive similar orders. If the government goes forward with the payouts, it is still not clear how much money would be earmarked for affected homeowners, some of whom still have mortgages on their soon-to-be-condemned houses.

The issue picked up steam last year when BBC ran a story on British families who settled in Pissouri but said they felt abandoned by the local government.