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Cyprus

New measures will monitor bus company expenses

By Evie Andreou

A special monitor installed on all buses which gauges how much fuel a bus consumes is just one of several recent measures imposed by the government to ensure bus companies can no longer overcharge for state subsidies on fuel, a government official said on Monday.
“This way we ensure that the ministry is charged for the fuel of the buses only and does not foot the bill for fuelling of other company vehicles or even private cars,” said Vladimiros Zavros, the official in charge of the transport ministry’s team which is overseeing state contracts with bus companies.
He said another important measure will be a telematics system to be installed on all buses.
“This will provide information on how many passengers use daily the buses, how many tickets are being sold, how many kilometres a bus runs per day, etc,” he said.
He said installation of the system has been delayed by a tender dispute, but that it should be introduced next year.
The new measures, plus the government’s demands that the island’s bus companies return millions of euros given out in state subsidies, are part of a tighter oversight structure imposed by the government since the auditor-general in his 2013 annual report highlighted a stream of costly irregularities since the bus system was overhauled in 2010.
All companies, Nicosia’s OSEL, Limassol’s EMEL, Larnaca’s Zenon, Famagusta’s OSEA, Paphos’ OSYPA and Intercity buses, were asked to submit their latest available financial statements.
Zavros on Monday cited the example of the Larnaca public bus company, Zenon which was among the first to submit its statements. It has now been asked to return €900,000 it received between 2012 and 2013 in interim payments.
“We realised they were used to pay salaries to a large number of directors. This is irregular, since they already knew that in their case, the company could only justify six such posts,” Zavros said. The excess €900,000 has already been deducted from payments the company received from the government for this year.
Instead of six, Zenon had around 15 directors and managers, with monthly salaries exceeding €5,000. It appears there was no system over bus driver salaries. One person who was also a company shareholder was listed as receiving €2,500, one part-time driver was receiving €1,700, while other full time drivers were receiving just €800.
He added that since 2010 all bus companies had told the number of directors each company could justify and how much their maximum salaries could be. Since the formation of his oversight team, controls have been reinforced.
He said that before his team was formed in February interim payments for fuel, fleet maintenance and rents were given out based on company reports and estimates of the ministry based on a number of variables.
“Through these audits we are conducting now, if it is shown that there are discrepancies, of course we will ask for money back. We will not agree to pay whatever the companies claim,” Zavrou said.
Older reports against OSEL are currently being handled by the police. Politis reported on Monday that the four cases against OSEL concern providing false data as regards fuel, issuing cheques in the name of shareholders but which were registered as company expenses, and irregularities in fuel purchase, and fleet maintenance.
The six companies had signed ten-year contracts with the government in 2010, when it decided to overhaul the island’s public transportation system. Both parties had agreed that a government contribution was necessary as it was deemed that the number of passengers would not be sufficient to make the contracts profitable. The state pays the companies an agreed rate per kilometre.
According to the auditor-general’s 2013 annual report, in 2010 all bus companies had submitted higher costs than expected.
The report had ruled that the contracts and the large amounts the companies received as government contribution “are cases that have a very high risk of corruption and squandering of public money, especially if controls by the contracting authority are not satisfactory”.



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