Cyprus Mail
Cyprus

Court decides today on Eleftheria Square injunctions

A LEGAL representative of the Nicosia municipality will appear before the Nicosia district court today to appeal a unilateral injunction order secured by Eleftheria Square contractor Miltiadis Neophytou.

The injunction forbids the town hall to cash in two letters of guarantee worth 4.7m euros that the construction company issued in October 2011.

Both sides are blaming each other for the delays in building the new Eleftheria Square which was due to be completed by September 2014, already a year after the original deadline set in the initial agreement.
Sources say the contractor blames the project’s architect, Iraqi born Zaha Hadid, for the delays, saying that her office took a long time to respond to questions regarding the project. On one occasion, according to the same sources, the architect took almost a year to give her consent regarding the kind of cement that should be used.

A representative of Hadid visited Cyprus yesterday on a scheduled meeting. The meeting was part of regular meetings with the contractor and didn’t have to do with the legal wranglings.
Contractor guarantees are considered standard procedure on large-scale public projects as they provide the authorities with a safety net in case complications arise over projects being completed. They usually cover 10-20 per cent of the total cost and are left untouched if the project is completed within the terms of the contract.

If a court rules in favour of the construction company, Miltiadis Neophytou is expected to ask the municipality to agree to a 522 day extension to complete the project and an extra 3m to be paid to cover additional costs.

If the injunction orders are repealed then the municipality will either cash the letters of guarantee and rescind the contract or force the contractor to finish the project and take on the additional cost.

If the municipality decides on a new tender, the process is expected to take one to two years. A further 18 months are needed to complete the project.

Sources say municipality’s primary goal is to finish the project as soon as possible.


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