Apostolos Tomaras
Any hopes that the Paphos–Polis Chrysochous road project would get back on track have now faded following the opening of new tenders, which have driven the cost sharply upward. The lowest bid submitted has pushed the price of the project to €124,850,000 (excluding VAT), up from the €73 million plus VAT for which the contract had originally been awarded to the Greek construction company INTRAKAT.
The two new bids have sparked concern at both political and administrative levels, with a real possibility that the process could collapse altogether. The situation is not expected to become clear before the end of the month, according to sources cited by “K”, and ahead of a meeting of all involved services scheduled for July 1.
Well-informed sources told “K” that alternative options will be presented at that meeting, as there are believed to be serious issues with the current tender process. These, the sources said, have created “dilemmas and concern over the decisions that need to be taken.” Under current conditions, options are reportedly very limited, potentially leaving the government with no choice but to consider the second “best” bid—despite it being €51.85 million higher. Such a move would significantly increase the final cost of the project, not including the construction of two additional traffic lanes already announced by the president.
After the fact
The tenders concern the section of road from Agia Marinouda to Stroumbi, covering roughly 15.5 kilometers. The Public Works Department had initially estimated the cost at €90.2 million (excluding VAT).
Before any final decision is taken, Public Works must clarify three key issues. First, it must explain the large gap between its own estimate and the submitted bids, ranging from €34.65 million to €38.74 million higher than expected. Questions are being raised over whether outdated data was used in the original estimate.
Second, officials must assess whether certain factors were overlooked in the tender documents. Third, they must examine whether the high bids could be the result of prior coordination between the participating companies.
The newspaper “K” outlines the options now facing the government and the Public Works Department for a project whose cost, based on current bids, exceeds €124 million.
The options
Under existing legislation, the government can either cancel the tender process or proceed with awarding the contract to the lowest bidder at €124,850,000 (excluding VAT).
Whatever the decision, sources involved in the project say the state is likely to incur losses. If the process is cancelled and re-tendered, there is also a risk, beyond further delays, that new bids could come in even higher than the current ones.
Cancelling the tenders is one option, but officials must weigh what alternatives exist. If the process is annulled, it would mean the government and Public Works consider the bids unjustifiably high, raising questions of public interest.
For now, moving ahead with the lowest bid appears to be the most likely path, with Public Works expected to make a final effort to secure a better outcome mainly “for appearances” and to reduce the political cost the government will inevitably have to manage.
“Not really options”
What remains unclear is what the government would do if the process were cancelled and the contract were not awarded to the lowest bidder.
In theory, though with little real likelihood, options include the second-best initial bid, direct awarding, or a state-to-state agreement.
However, the second-best initial bid is not valid at this stage, since the contract was already initially awarded. According to the auditor general, once a contract is signed, the second bidder cannot be considered unless there is evidence of misrepresentation.
Direct awarding is only allowed in limited cases, such as non-competitive projects or emergency situations like natural disasters.
A state-to-state agreement can only proceed under specific conditions, including shared public-interest objectives, as seen in the “digital citizen” project between Cyprus and Greece, or if the selected contractor has less than 20% of subcontracted private works, or if it clearly serves the public interest.
The project
The original contract for the Paphos–Polis Chrysochous road was signed in 2021 for €72,979,000 (plus VAT). During implementation, the contractor submitted claims worth €36 million and requested a 59-month extension. These requests were deemed unjustified by all relevant committees and, according to the government, could not be legally accepted.
The new tender process, opened last April, attracted two bidders: Cyfield Construction Ltd. with a bid of €124,850,000 (excluding VAT) and a joint venture between Araco Construction Cy Ltd. and Geostroy AD with a bid of €128,935,480 (excluding VAT).
The questions
Faced with the risk that the project could stall indefinitely, the government is stressing public interest, arguing that costs with the original contractor could have reached €119 million, without explaining why the Public Works Department initially awarded a contract that did not reflect the real financial conditions.
Key questions now being raised toward the transport ministry include whether the July 1 meeting will examine responsibility for the current situation within public works; whether the contract was awarded based on incomplete data; whether the original contractor had full awareness of Cyprus-specific construction constraints, such as restrictions on the use of excavation materials; and whether public works properly evaluated the tender framework or simply relied on the principle of awarding the lowest bid in the name of public interest.
