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Nothing shipshape about police boats, auditor-general rules

Justice Minister Ionas Nicolaou aboard one of the new patrol boats last year

Four problem-ridden patrol boats procured by the police at the end of 2015 following questionable procedures should undergo inspection by independent experts, the auditor-general said on Wednesday, censuring the force for failing to submit all the documents he had asked for during his review.

In his report, Odysseas Michaelides also said there was nothing improper in the fact that the supplier of the boats appeared to be linked to the president’s son-in-law.

The marine branch of the force took delivery of the four boats from Lung Teh Shipbuilding, a Taiwanese shipyard, in December 2015.

The boats cost around €1.7m altogether and feature dual jet engines and have a range of 180 nautical miles.

It soon emerged that three of the boats were faulty, with glitches in the engines, the propulsion systems and the pumps, among other issues.

During his probe, which included the possibility of a presidential connection, Michaelides had asked the police to submit certain data, which the force failed to do so.

“We think the failure to submit the data is not justified since the police should have had them during the inspections it carried out when it took delivery of the boats,” the auditor said in his report.

Michaelides had asked for the results of performance tests, as well as the calibration certificates of the equipment used to take the measurements.

“In light of the above, and in combination with the failure to measure the boats’ actual power (as it was expected) we think their inspection by an independent expert is imperative to confirm whether they meet the specifications,” the auditor said.

The police responded, saying it had responded on Wednesday to the auditor’s 28-page questionnaire it had received on October 27.

The auditor also questioned the supplier selection process, charging that the review committee had been biased in favour of the eventual winner.

Twice the committee had rejected the lowest bidder, Italian Cantiere Navale Vittoria, for reasons that proved to be unjustified.

It was overruled twice by the tender board, eventually recommending the acquisition of the Italian firm’s boats.

“With its actions and the manner it evaluated/handled the bids … the review committee did not, in our view, treat the firms that took part in the competition impartially and equitably,” the auditor-general said.

Lung Teh appealed the decision in January, 2014 and managed to convince the tender review board to rule in its favour by a three-two majority vote on the grounds that the Italian firm did not meet the conditions regarding experience in building such craft. That was the same reason used by the review committee to reject the Italian firm the first time.

The audit service expressed disagreement with the decision, siding with the minority, that included the chairman of the board.

“The decision of the minority … is in line with the position of our service’s representative in the tender board meeting which judged that Cantiere Navale Vittoria’s bid met the conditions for participating in the competition.”

Lung Teh was represented by the law firm the president founded before the review board.

Another matter that raised eyebrows is the fact that part of the correspondence with the Taiwanese company was done through FLC Modena Automobile, local representatives of Maserati cars.

The shareholders and partners in Modena are Christos Chrysostomou – also the director of Follyson Holdings, the Cypriot agents for the Taiwanese company – Theofanis Philippou, a managing director at the law firm, and Yiannos Loutsios, the president’s son-in-law.

Explaining this, Chrysostomou said he used Modena’s email address because of temporary problems with Follyson’s email.

Loutsios denied any connection to the patrol boats deal and dismissed insinuations of a conflict of interest, in that his father-in-law is the president.

Anastasiades had asked the auditor-general to look into allegations suggesting his in-laws had been favoured in the tender.

 

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