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27 May, 2024
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Uncovering transparency issues in public contracts

Examining the alleged favoritism and ethical concerns surrounding 'National Contractors' and Public Works Projects in Cyprus

Apostolis Tomaras

Apostolis Tomaras

The uproar surrounding a revitalizing project on the outskirts of Nicosia, the capital, is just a drop in the bucket compared to the broader issues plaguing certain contracting firms and the administration overseeing public contracts. While extensions, delays, and final project costs represent one side of the coin, there's an unseen side rife with potentially unfair procedures that could lead to legal disputes over possible wrongdoing.

A cause for concern and longstanding suspicion is the recurring phenomenon where specific companies consistently secure the majority of public contracts, often referred to as 'national contractors' in the realm of public works. These companies, which have enjoyed a privileged status within the public sector, trace back to the early days of the Republic of Cyprus. Over the past 34 years, entities like the late Paraskevaides' firm, Miltiades Neophytou aka Miltis, and George Chrysochos of Cyfield, formerly Nemesis Constructing Public Company, have dominated this landscape.

Cyfield, notably succeeding Nemesis, epitomizes the 'national contractor' model. Despite substantial delays, including extensions exceeding 50% of the project timeline, Cyfield remains prominently involved in public works, such as the Nicosia perimeter road and the Limassol-Saïtta road. However, while the company attributes delays to various factors, questions linger regarding potential financial implications and ethical concerns.

The most pressing issue arises from Cyfield's connection to the SAPA scandal, where Nemesis, its predecessor, was implicated in bribery allegations. Despite being ostensibly blacklisted from public contracts, Cyfield, through corporate restructuring, has circumvented legal repercussions and continued to secure significant projects.

Below is a list of the projects undertaken by CyField:

These revelations cast a shadow over the transparency and integrity of the public contracting process, prompting calls for accountability and reform. However, official responses from entities like the Public Works Department have been notably absent, exacerbating concerns about accountability and oversight.

The lack of transparency extends to the contracting framework itself, with industry experts like ETEK highlighting flaws in the awarding process and dispute resolution mechanisms. Complex bidding procedures and rigid selection criteria favor larger firms, stifling competition and disadvantaging smaller contractors.

Ultimately, the prevalence of 'national contractors' and systemic issues in the contracting process underscore the need for comprehensive reforms to ensure fairness, transparency, and accountability in public procurement practices.

[This article was translated and edited for brevity and clarity]

Cyprus  |  business  |  corruption

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