State to cover €12M shortfall from licensing revenues

Interior Minister Konstantinos Ioannou expressed satisfaction with the progress of the Local Government Reform, despite minor issues during the initial days of its implementation. Speaking during a visit to the Licensing Sector of the Larnaca district administration, Ioannou noted that the initial phase focused on acclimating staff, with the expectation of a smoother operation in the coming weeks.

"Minor problems were expected, but I am very pleased with the information I received," Ioannou said. "This week was more about acclimatising staff. We expect next week to get into real work, and the various problems that arise will be solved along the way. So far, nothing substantial has been presented."

Ioannou acknowledged technical issues with the new system, which are being addressed by a working group composed of Interior Ministry officials and a private company.

During his visit, Ioannou toured the offices of the Larnaca district administration and was briefed by President Angelos Hadjicharalambous and the management team.

In response to questions about the number of applications submitted and approved through the "HIPPODAMOS" system since its July 1 launch, Ioannou stated that there has not been an increase. "One is the design on paper, and another is the implementation in practice, as with any software system," he said. "In the full development of the software, there were some—I repeat—very small problems, which are being solved. So I expect next week to be at a real pace, and it will pay off."

Addressing concerns about revenue from planning and building permits, Ioannou clarified that 60% of licensing revenues are legislatively mandated to be allocated to municipalities. "This is institutionalized in legislation. With development, projects arise from the side of municipalities that need to be done to help development."

However, Ioannou highlighted a significant deficit for provincial agencies due to this allocation. "Licensing revenues are just about equal to expenses. With 60% attributed to municipalities, we estimate a deficit of €12 million," he explained. The Minister emphasized that the deficit issue must be resolved without increasing fees and mentioned ongoing consultations with the Union of Municipalities to address the real costs involved.

"The state should contribute a large part of this amount," Ioannou stated, assuring that municipalities will not be deprived and that any resolution will be reached through consultation.

Angelos Hadjicharalambous, President of the Larnaca provincial organization, expressed confidence in resolving minor operational issues. "There is full understanding with the Minister of Interior and ministry officials. We are in good progress. We expect in the coming days to increase our production both for licensing and to solve some other individual problems in water supply and sewerage."

The Larnaca EDA also issued a statement, affirming the Minister's satisfaction with the reform's progress despite minor issues. It noted that building and planning permit numbers have not increased due to technical problems with the "HIPPODAMOS" system, which are being resolved by a specialized working group.

The statement emphasized the need to address revenue allocation issues through legislative regulation without increasing fees. The matter will be further discussed in September to find a viable solution for the Larnaca EDA.

"The initial stages of change sometimes have difficulties," Hadjicharalambous said. "Through close and continuous cooperation with the Ministry of Internal Affairs, these issues will be resolved."

[Information sourced from CNA]