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Cyprus is preparing for significant changes in its energy sector following the formal termination of the contract between the Natural Gas Infrastructure Company (ETFA) and CPP-METRON Consortium Ltd (CMC Ltd) for the construction of a vital terminal in Vasilikos. Official announcements, expected soon, will mark the conclusion of negotiations between the parties, with updates provided to the Energy Minister as of July 16.
The exit of the Chinese consortium from this ambitious energy project leaves Cyprus in need of new contractors to complete the remaining 40% of construction. Concurrently, the government plans to launch an investigation into the project's past failures, which have tarnished Cyprus's reputation and potentially deterred future international investments. This development is expected to prompt revisions to the current public works concession framework, addressing significant shortcomings.
Key concerns include the perceived inadequacy of the current selection criteria, which heavily favor the lowest bids, and allegations of corruption in the contractor selection processes. In response, the government is considering substantial changes to procurement rules, including the introduction of qualitative assessments and enhanced oversight of contractors. Stricter protocols for project extensions, penalties for underperformance, and the creation of a blacklist for unreliable firms bidding on public works contracts are also being discussed.
Economically, Cyprus faces challenges due to the withdrawal of the Chinese consortium, potentially leading to legal disputes over project abandonment and unresolved financial claims. The fate of the partially completed FSRU ship, valued at €190 million, remains uncertain amid ongoing negotiations.
Against this backdrop, uncertainty surrounds the timeline for the introduction of liquefied natural gas (LNG) to Cyprus for electricity generation. The country's reliance on costly fuel oil highlights the urgent need for the efficient completion of energy infrastructure projects to facilitate the transition to more economical energy sources.
In conclusion, Cyprus is navigating a complex aftermath following the termination of its contract with the Chinese consortium, aiming to rectify past project failures and strengthen future project management practices amidst evolving energy needs and economic pressures.
[Summary of Apostolis Tomaras' original story in Greek published in Kathimerini's Cyprus edition]
