By Angelos Anastasiou
A COUPLE of months ago, the government finalised awarding a 10-year, €70-million contract to a private consortium for the construction and operation of a waste-management facility in Pentakomo to cover the needs of the Limassol district, despite having been presented with an alternative that would have eliminated all cost to the taxpayer.
Because of non-conformity with European waste-management and minimum recycling standards that warranted a fine for Cyprus from the European Commission, as well as tight deadlines to qualify for partial funding of the project by the EU, the interior ministry was in a hurry to press ahead with the project late last year, and invited tenders early in 2014.
The lowest bid, submitted by a consortium comprising Cypriot construction giants Medcon, Loizos Iordanou Constructions, and Miltiades Neophytou Contractors and Developers, and Dutch recycling firm db Technologies BV, at over €70 million over 10 years, was considered a huge improvement on the ministry’s estimate of nearly €122 million for the project’s cost.
But amidst the tender process in April 2014, a strange little-known company, Egnedol Ltd, approached government officials with an offer that seemed to turn everything on its head.
“Back then we met, among others, with Undersecretary to the President Constantinos Petrides, Environment Minister Nicos Kouyialis, and Interior Minister Socratis Hasikos,” said Antonis Antoniades, one of the firm’s co-founders.
The offer was for the company to be sold the Kotsiatis and Vati landfills, which would operate as a “bank of raw materials” for the waste-to-energy company, and included the construction and operation of the Pentakomo facility, all at no cost to the government.
“That’s because garbage – plastic, organic materials, metals, and so on – is not garbage,” Antoniades explained. “To us, that’s energy. That’s profit.”
Apparently, Egnedol holds some 30 patents, each representing a waste-management technology more efficient than any other devised thus far, four of which are waste-to-energy methods – generating electricity from garbage. Not only that: by-products from various waste management processes are also planned for, with several side-projects like fish-farms and even a cheese-production plant surrounding the main waste-management facility.
But talks never went past initial exploratory meetings, and the contract was finally awarded to the lowest bidder of the initial tender process in July.
“We had received very positive reactions from everyone, except for the interior ministry,” according to Antoniades. “That’s where things got stuck.”
The pioneering entrepreneurs quickly realised that ministry officials and technocrats couldn’t help being sceptical of their wares, and told them that a visit to the company’s UK plant could be arranged in order to help allay their concerns, provided they signed a confidentiality agreement.
What happened next isn’t quite clear, but it seems likely that the old truism about things that sound too good to be true kicked in, and an invisible hand promptly cut off all contact.
“That’s when things fell apart – when we asked for a confidentiality agreement before showing them around our UK facility,” Antoniades said. “We never heard back from them after that.”
Late in April, vague reports surfaced in the press of a brewing row between Hasikos and Kouyialis, with some commentators claiming it had to do with the two men’s opposing views on Egnedol’s proposal.
Not so, Kouyialis told the Sunday Mail.
“The interior ministry was never negative towards this proposal,” he said. “It has not rejected anything. But at that time, the deadline for finalising a solution for the Pentakomo site was pressing hard, and the joint decision that the tender process could not be suspended was the right one.”
According to Kouyialis, an EU directive saying all of Cyprus’ landfills had to be closed down by June 2013 was never complied with, and the government was able to secure an extension until 2015 – otherwise a fine was sure to come our way.
“We are certainly aware of this investor’s offer, and nothing is off the table in terms of future prospects,” Kouyialis added. “But at that time it was simply too late to consider anything else.”
But that isn’t quite Hasikos’ side of the story.
Asked about the issue by the Sunday Mail, he made quite clear where he stood – but he didn’t mention pressing deadlines.
“These investors presented hot air,” he said. “When we pressed them for specifics, they had no answers.”
Hasikos implied Egnedol was seeking to be awarded the contract without being subjected to the scrutiny of the ministry’s tenders committee.
“There will be no awarded contracts without tenders as long as I’m here,” he said. “There are procedures and rules. Why did these people not enter the tender process? Did they not know about it?”
Since then, Egnedol has entered various bidding processes for similar waste-to-energy projects, and won one in Wales, estimated to cost some €450 million.
“During the meeting at the interior ministry, we told them about the Wales prospect – some scoffed, and most could not hide their scepticism,” Antoniades said with a hint of a sarcastic smile.
But life goes on – and so did the aspiring garbagemen.
“We’ve lost the Pentakomo job – fine,” said the company’s rep. “We’re interested in a couple of things right now. One is the [upcoming] Nicosia plant, which would also include the Kotsiatis landfill. And two, we’re building a small plant near the Limassol port – I say small, it’s actually a €25-million investment that will employ 47 people. It will start with aluminium recycling, and then we’ll add recycling of plastics.”
Egnedol considers the Limassol plant a minor project by their standards, but believe it can serve as a foothold in the Cyprus market ahead of the Nicosia plant bids.
“One of the reasons we couldn’t enter the Pentakomo facility tenders process was that its parameters were too narrow,” explained Antoniades. “It asked for the minimum required to ensure compliance with the EU directive. That is, separating garbage, recycling some, burying the rest – a crime, in our opinion. As I said, garbage is energy to us. It’s profit.”
So they are hoping the Nicosia waste-management tender parameters will be opened up to include new technologies that will allow Egnedol to table its proposal officially.
“Our proposal will be the same,” said Antoniades. “We want the Kotsiatis landfill and will undertake the construction and operation of the Nicosia waste-management facility using private money.”
In addition, Egnedol offers a scheme that involves the creation of a “green fund”, to which it pledges to contribute €1.5 million annually, provided it is earmarked for the development of communities surrounding the facilities, and the restoration of what is now the Kotsiatis landfill into a park.
“The plant will create very cheap electricity, which can then either be sold to the public at a price as low as 16 cents per kilowatt hour, or channelled to the existing national power grid,” Antoniades said. The EAC’s price for household electricity as at mid-2013 was estimated at 25 cents per kilowatt hour.
“All we would need is a power-production licence,” he added.
Egnedol’s people estimate that its proposal will earn the government €45 million in direct profits, and add to that the cost for the new facility it will not have to assume.
Asked whether the firm will be considered if it submits a tender when Nicosia’s waste-management project is announced, Hasikos was, again, dismissive.
“Sure,” he said. “If and when they enter the tender process, if and when tenders are invited, they’ll be considered – who knows when that will be.”
Faced with such dismissive attitudes, Egnedol has little reason for optimism.
“Look, as a country, we’re deep in the throes of an unprecedented crisis,” said Antoniades. “But it also presents us with a great opportunity for change. If we fail to seize it now that we are being forced to, it will never, ever happen.”
“There is a hard, entrenched establishment in place – that’s nothing new,” he added. “And it probably makes sense that any new ideas, or people, that might try to do things more efficiently could be perceived as a threat. But the state has to not only accept, but actively encourage – through tax-breaks, for example – the development of hi-tech industries, if only to reverse the dramatic brain-drain Cyprus is suffering. There is so much education in Cyprus, and we’re losing it because we have nothing to keep it busy with.”