Cyprus Mail

Auditor general raises further SAPA concerns

Auditor-general Odysseas Michaelides

By Angelos Anastasiou

Loizos Kappas, a member of EDEK’s central committee and one of the five people comprising the Tenders Review Authority, which decided last Thursday that contractors who bribed municipal councilmen in the Paphos Sewerage Board (SAPA) scandal should not be banned from bidding for other public contracts, received a €20,000 donation for his party from one of the affected contractors, Auditor General Odysseas Michaelides told a dumbfounded House Watchdog committee on Tuesday.

While the donation was not illegal, Michaelides noted, it did raise conflict of interest issues when placed in the context of the recent favourable TRA ruling, which is why he will forward his findings to the Legal Service for further investigation.

Michaelides said the incident of party funding involving EDEK and Kappas, which dates back to 2009, was revealed by Defteri Anagnosi, a news blog. The site posted the story, along with a copy of the slip from when Kappas deposited the €20,000 cheque in EDEK’s bank account. The deposit was made by Kappas personally, and the name “L. Iordanous” can be seen on the slip in a hand-written scribble.

“This cheque had been issued by a joint venture involved in the SAPA scandal, and [Kappas] transferred it to the party,” Michaelides said.

Last Thursday, the TRA issued a majority ruling, by which an earlier decision banning contractors involved in the SAPA scandal from future public tenders was overturned.

Kappas, Yiorgos Anastasiou and Solon Papatheocharous, voted against the ban for reasons of public interest.

Chairwoman Efi Papadopoulou, a former Supreme Court judge, and member Vasilis Palmas, former government spokesman, were the two dissenting votes.

“The distortion of facts and character assassinations have replaced political dialogue,” EDEK said in a statement.

“In 2009, then-member of EDEK’s Central Committee Louis Kappas, in his capacity as a Laiki Bank employee, duly received and deposited a legal donation to the party’s account. Upon assumption of his duties at the Tenders Review Authority in 2014, Kappas resigned all party posts.

“In 2015, the TRA made a majority decision. If there are responsibilities for this decision, these belong not to the TRA, but to those who have failed to bring these companies before justice for their own reasons,” it continued.

At the Watchdog committee session, Papadopoulou said she had not been aware of the issue Michaelides brought up, and noted that her priority lies in safeguarding the TRA’s stature.
The committee had been discussing an issue raised by AKEL regarding the terms included in public tenders.

AKEL claimed that the terms were so demanding that they could only be met by a handful of large contractors, who were the same ones involved in the SAPA bribery scandal.

Thus, the party argued, the terms should be relaxed so as to allow more companies to bid for projects, strengthening competition.

Transport minister Marios Demetriades countered that the terms of ongoing tenders could not reasonably be amended mid-way without being cancelled and started from scratch.

During discussion AKEL MP Irene Charalambidou raised a particular case concerning roadworks on Pernera avenue in Paralimni, and claimed that Demetriades has “poor comprehension skills”.

The transport minister took offence and replied that when parliament invites a government minister, it has an obligation to display the respect due the office.

After the session, Demetriades said he was surprised the issue was still being discussed.

“The reason we have allowed for some changes to the terms of public tenders was to strengthen competition through the participation of as many contractors as possible,” he said.

He argued that it is not proper to change the terms of a tender while it is ongoing. Instead, the terms should be examined and revised as needed on a regular basis.

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