Abattoir probe focuses on high cost of animal waste processing

From 2004 to 2021 one company held a monopoly over the processing of animal waste and by-products, with the government paying a marked-up price for these services despite repeated calls on it to open up the market to competition, a former official with the auditor-general’s office said Monday.

Andreas Hasapopoulos, formerly director of technical audit, was testifying before a committee of inquiry looking into the Cypra abattoir and the actions of state authorities, including whether there have been any interventions by anyone to benefit it.

Cypra is owned by the husband of the state treasurer. It found itself in the eye of the storm last November after some 100 staff at the facility tested positive for the coronavirus. It later emerged that the majority were asylum seekers who had not been declared to the department of social insurance.

The matter gradually snowballed, revealing a slew of building code and environmental violations that were never properly addressed, ostensibly due to slow bureaucratic and legal procedures.

In his testimony, Hasapopoulos spoke of another company, by the name of Sigan Management Ltd, which he said held a monopoly on animal waste processing from 2004 to 2021.

Unconnected to Cypra, Sigan is a subsidiary of the Galatariotis Brothers group of companies.

Hasapopoulos told the panel that years ago the auditor-general’s office had provided an estimate as to a realistic value for the government contract to the private sector to manage and process animal waste.

Their estimate came to €560,000 a year, but the contracting authority – the state Veterinary Services – rejected it, seeking another evaluation from the state treasurer – the official with the final rubberstamp authority on public procurements.

Government services subsequently came up with a different estimate – €600,000 to €800,000.

Curiously, the witness said, despite this number the actual contract awarded to Sigan was worth €1.3 million – approximately double the estimate.

“We tried to recommend the holding of open tenders in order to secure lower prices, the reason being that we knew – as did the Veterinary Services – that the prices quoted for Sigan should have been lower,” Hasapopoulos told the committee.

The ongoing probe itself was initiated after allegations that state treasurer Rea Georgiou stopped a cheque deposited by her husband’s company as guarantee of faithful execution of an agreement with the government, just hours after it was deposited in the government account.

The €54,000 cheque was deposited after her husband’s slaughterhouse and animal waste processing plant Cypra failed to honour a 2015 animal waste processing contract with the veterinary services.

Georgiou had denied any wrongdoing and said there was a court order which prohibited the seizure of the guarantee pending conclusion of the case and that the treasury, according to the constitution, is the state authority managing court orders.

She also said that at the time, to avoid any actions that would suggest conflict of interest, she had recused herself from the process.

Asked about his relations with Georgiou during his stint at the Audit Office, Hasapopoulos said they were cordial but always professional.