EU probes Vasilikos terminal over misuse of funds

The European Public Prosecutor’s Office (EPPO) has launched an investigation into the liquefied natural gas (LNG) import terminal project in Cyprus, citing suspicions of public procurement fraud, misuse of EU funds, and corruption. This development comes after the departure of the Chinese consortium initially awarded the project.

The probe has significant implications for both the Cypriot government and the LNG project, which is funded by the EU's Connecting Europe Facility (CEF) with €101 million. The investigation could potentially lead to Cyprus being asked to repay some of the disbursed funds if criminal activities are uncovered.

In response, the Cypriot government has pledged full cooperation with the EPPO, emphasizing its commitment to transparency and accountability. The investigation, announced last Thursday, is based on concerns raised in a January 2024 audit report by Cyprus’s Auditor General, as well as reports from the European Court of Auditors and CINEA.

A specialized team of criminal investigators has been deployed in Nicosia, working directly under the EPPO’s authority. The probe will examine the entire project, from the awarding of the contract to the Chinese consortium to any potential illegal fees or delays.

The EPPO’s investigation will focus on potential fraud in public procurement and misappropriation of EU funds. Should evidence of criminal wrongdoing be found, individuals involved could face prosecution in Cypriot courts. The EPPO’s processes include presenting cases to a three-member department in Luxembourg before any indictment is formally issued.

The probe also involves assessing the financial damage caused by the project, including the possibility of freezing assets linked to the case. Of the €101 million allocated, approximately €68 million has been spent. The remaining funds are now frozen pending the investigation’s outcome.

The investigation began on March 22, 2024, following an evaluation of the audit report, which highlighted issues with the project's tendering process. The report alleged inadequate competition and procedural violations in the awarding of the contract to the Chinese consortium, including accusations of cartel involvement by one of its members.

The findings could lead to further scrutiny of the project's approval process and the role of high-level officials in pushing for the contract’s approval despite known issues.

The EPPO’s involvement underscores the seriousness of the allegations and the EU’s commitment to addressing financial misconduct within its member states.

[Summary of Apostolis Tomaras' original story in Greek published in Kathimerini's Cyprus edition]