DESPITE having been a member state of the EU for 11 years, politicians still do everything they can to limit competition. It is not just because old habits die hard but the operation of a free market and competition diminishes the power of the political parties, which are determined to preserve as much of it as they can.
The law they passed dictating which shops and in which areas should stay open was a perfect illustration of this power-wielding. The law, in effect, was trying to re-distribute the retail income in favour of kiosks and bakeries by keeping the big supermarkets closed on Sundays. But is it the politicians’ responsibility to decide how retail income should be distributed or the market’s?
A few months ago, the parties were discussing the possibility of lowering interest rates, placing ceilings on rents and other such interventionist measures that would cause only harm to the economy. It is in this in context the regulations for tenders for the concession for water sports at different beaches should be viewed. Political parties approved regulations the main purpose of which was to prevent new businesses entering the market.
How else could the regulation stipulating that only a business or individual with five years experience in the water sports business was eligible to submit an offer for the concession? The regulation is blatantly protectionist, barring access to anyone that might want to enter the water sports business and creating conditions for collusion. A closed shop is created, giving existing water sports businesses great scope for collusion – they could decide who submits a tender for each beach and put in low bids as they would not face any competition from new water sports businesses.
New businesses would not have the five years’ experience to submit a bid, while municipalities will receive less money for the concessions as there would be no real competition. EU directives, quite rightly, prohibit such restrictions being placed on tender procedures, clearly stipulating open market practices, but as usual the political parties do as they please. The Auditor-General warned any tender that loses the bid for a beach concession would be able to appeal against the procedure to the Supreme Court and would win.
As if this were not bad enough, in their effort to ensure the existing businesses would keep their beach concessions indefinitely, deputies added another pre-requisite. To submit a tender, a business had to have five years experience in “the area in question”. But as the mayor of Ayia Napa quite rightly asked, which was the area in question? “Is it the specific beach, the area near it, the city or Cyprus as a whole?”
We suspect deputies meant “the specific beach” because this would allow the water sports business never to give up the concession, even if it submits a one-euro tender. It would be the only one to have “five years experience in the area (beach ) in question.”