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Cyprus

Audit chief should butt out, minister says

Auditor-general Odysseas Michaelides

By Angelos Anastasiou

Auditor-general Odysseas Michaelides should stick to his own duties and not try to replace the executive branch of government and the legal service, Interior Minister Socratis Hasikos said on Wednesday.

The interior minister said Michaelides’ behaviour could risk paralysing the state, because a climate of terror has been cultivated among civil servants due to his tactic of making everything public and criticising every executive decision.

“Civil servants are afraid to make decisions because the Auditor-general bogeyman is always hovering over them,” he said. “Everyone should stick to their role, as prescribed in the Constitution.”

Hasikos became enraged by Michaelides’ efforts to block a government decision to extend a waste-management contract at the Koshi site by seven more years – until 2027 – in exchange for substantially lower cost to the public – from €75 per tonne to €39.90.

But the seven-year extension, Michaelides warned in a letter to Hasikos in July, could be deemed irregular by the European Commission, either on grounds of benefiting the site operator or simply because there is no legally prescribed way for the government to extend an existing agreement without re-inviting tenders.

Michaelides cited a legal opinion by the Attorney-general, dated May 27, 2014, to back his claim.

However, his recommendation was not for Hasikos to scrap the agreement, but rather, to include clauses protecting the government in the event of the European Commission deeming it illegal and fining Cyprus.

Michaelides suggested four alternative avenues to address the issue: referring the matter to the European Commission for a decision prior to taking any action; introducing a clause in the agreement extension, terminating in case the European Commission deems it illegal; introducing a clause that any fines resulting from signing the deal will burden the site operator; or, requesting further legal advice from the Attorney-general.

Hasikos opted for none of the above, claiming his actions were impervious to legal challenges, and on Wednesday lashed out at Michaelides for engaging the House Watchdog committee to look into the matter.

“As you know, the Auditor-general always has a way to make issues public – he sends them to multiple recipients to ensure they are leaked,” he told reporters.

“Our top priority was how to reduce the amount taxpayers had to pay for waste-management, which is why we went ahead and are now ready to sign the extension.”

Hasikos said that in his letter, Michaelides acknowledged that the government has sole executive power, but on the other hand he involves the judiciary to block an executive decision.

“At the end of the day, who governs here?” he asked.

“The elected President and his appointed cabinet, or the Auditor-general? Can we not make decisions? He can always audit our decision after it has been implemented, but he can’t stop us making the decision.”

Hasikos said the contract extension is fully legal, since it contributes to the general public’s welfare.

“EU directive 2014/24 allows the amendment of contracts, provided this serves the public interest and does not benefit the contractor,” he said.

“The government will go to the House and explain exactly what it has done.”

In a written statement later on Wednesday, Michaelides defended his actions and questioned Hasikos’ motives.

“We thought it our obligation to raise our concerns with the minister, and suggest ways the risk of being fined could be minimised for the Cypriot taxpayer,” the statement said.

“The contractor accepted a €20 million loss on the existing contract for the remaining five years, in exchange for revenues of €70 million for the next 12 years, without an open tenders’  procedure… and this while the lowest bid at the respective plant in Limassol was €19 per tonne.”

The Auditor-general signed off his statement with a few thinly-veiled barbs at Hasikos.

“We will not comment on the minister’s terrorism remarks, since they are vague and unfounded,” he said.

“Because the minister obviously has cases from his own ministry in mind, like the sewerage systems of various districts, Turkish Cypriot properties, and town-planning zones, we expect his explanations.”

“In closing, we remind everyone’s obligation to respect legality, and note that citing the public interest under no circumstances justifies diverging from legality.”

 


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