The island’s public transport is appalling and will have cost taxpayers some €500m over its 10-year contract period that expires in 2020, MPs heard on Thursday.
The issue was discussed by the House watchdog committee, which looked into whether there was mismanagement and waste of public monies.
Auditor-general Odysseas Michaelides described the system as “appalling,” stressing the need to intensify audits of the companies’ books in a bid to limit the losses until 2020, when their contract runs out.
Michaelides said the biggest mistake in the process was not going to an open tender n 2009. And it was only due to the financial crisis that the government forced a review of the agreement in 2012, cutting the annual cost from €100m to around €55m.
“Shouldn’t even think about extending the contracts,” Michaelides said.
Transport Minister Marios Demetriades said the new contracts would be based on the lowest bid and the lowest cost.
The minister said the government was looking to hire a consultant to advise on the best way of proceeding after the expiry of the current contracts.
The current 10-year agreement with bus companies was signed by the previous administration in 2009.
The contract signed with the companies was a highly complex, unintelligible agreement, which had essentially created government-funded public transport companies.
The government never went to open tenders on the suggestion of the Road Transport Department, which said going directly to locals would prevent unrest among the 200 bus operators.
Trouble with the EU was averted by way of concession contracts.
The agreement was signed during the tenure of former minister and now Limassol Mayor Nicos Nicolaides.
His successor, Erato Kozakou Marcoullis, had asked for a review of the system in all districts after it transpired — due to the economic crisis — that taxpayers were paying too much money for a mediocre service.
There were also reports in 2012 about bus companies that employed relatives as executives and paid them princely salaries.
The state has managed to cut down the subsidy paid to companies but the system is still problematic with strikes being a frequent occurrence.