By Angelos Anastasiou
Excessive staff entitlements, poor bill collection, and irregular public procurements, were identified in the Audit Service’s 2014 report of the semi-state Electricity Authority of Cyprus, released on Monday.
According to the report, amendments need to be made on contributions to staff benefits – which totalled €10.6 million in 2014 – so that the cost is borne by employees, rather than the EAC, as well as the status of unpaid leave.
“The amendment of the authority’s regulation should be studied so that unpaid leave for personal reasons is not counted as pensionable service,” Auditor General Odysseas Michaelides noted.
Bill collection appeared to be highly dysfunctional at the EAC, with electricity bills in arrears approaching €50 million.
“There is a necessity for stricter enforcement of the authority’s collection policy to address the issue of arrears, and timely imposition of more effective measures, including power cuts and legal measures, to safeguard the authority’s interests,” the report said.
A similar distortion was found in spotting metres that need to be replaced, and in adequately securing the proper operation of various types of metres.
“Some 88,067 metres have reached the end of their useful life but remain in operation,” Michaelides found.
A string of failed invitations of tenders were also recorded in Michaelides’ report. The Audit Service recommended various measures to overcome the failures and prevent them from happening in future, including disciplinary probes, amending invitation terms and closely adhering to the legislative framework governing tenders processes.
Special rates to families with three or more dependent children and families in need should be abolished, and social policy should be implemented directly by the government, Michaelides recommended. Under the current system – where such families are offered cheaper electricity, the rest of the consumers bear the cost – accumulated losses to the EAC since 2006 were over €3.5 million.
Finally, the Audit Service found that two cases of land expropriation carried out in 2000 in Limassol for EAC projects have not yet been finalised, exposing the authority to lawsuits by the owners, with the payment of large redress sums being a likely outcome.