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Michaelides questions legality of minister’s involvement in port deal

Former Transport Minister Marios Demetriades

The auditor-general raised doubts on Thursday whether it was legal for a government minister to take part in preparing the terms of the agreement for the privatisation of the port of Limassol.

Speaking before the House watchdog committee, which dealt with his April 5 report on the matter, audit chief Odysseas Michaelides said he doubted that Marios Demetriades’ involvement was legal. It is unacceptable, he said, for a minister to participate in the preparation of the economic and technical conditions of the deal.

“It is completely unacceptable for a minister to participate in committees dealing with tender issues, during the preparation of economic and technical conditions, on the same committee with civil servants no less,” the auditor’s report said, adding that it was well known that the political authority and the administrative operation of the state should be separate.

Michaelides said the decision was for the tender to be awarded by the special tender board but it the end it was made by the cabinet, which should not have been involved. Tenders are not awarded using political criteria, the auditor said.

Demetriades disagreed with the auditor, saying he got involved in certain critical issues and to the extent that made the deal possible.

He also sought to defend the decision to go ahead without taking the state Legal Service’s advice on board.

“We followed the advice of the state’s foreign consultants, selected through open procedures, and who have huge experience in drafting such contracts,” the minister said.

A legal service representative told MPs that the transport ministry had submitted the final documents to the cabinet for approval before they could give their comments.

“They were submitted to the cabinet before the final observations and the agreement of the Legal Service on the issues that were raised,” the rep said.

The committee heard that the state’s lawyers had spotted provisions that clearly favoured the bidders.

“As a general comment the attorney-general thought it was important to note … that certain provisions of the concession agreement appeared to favour the companies. These concern the assumption of significant obligations by the state for third-party actions that are not within the control of the state,” MPs were told.

Committee chairman Zaharias Koulias said he would recommend asking the attorney-general to look into the matter and decide accordingly.

Main opposition Akel, traditionally against privatisations, asked for the minister’s resignation.

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