Objections to public works cause pricey delays

Cyprus has various problems when it comes to carrying out projects, such as the unforgivable bureaucracy. In recent years there has been another big issue in the execution of public tenders for infrastructure projects and others.

Each government tries to promote infrastructure projects that help both the wider economy and various communities or districts.

The tenders are opened by the state, authorities decide who will be the successful bidder and suddenly another bidder who did not win the tender files an objection with the court, freezing the award until the case is heard, which takes at least tow to three years.

An example in hand concerns the traffic cameras, which were delayed by 10 years, and more recently the planned Paphos-Polis road.

Quite rightly the communities expected to benefit from projects protest against the objection to the tender process and in the meantime construction costs rise, while the tourism and development sectors lose money. In one case, the affected communities requested that the project be assigned to the winning contractor and if the complainant wins in court the state should pay them any compensation due.

That is one way this matter could be handled, however the bidder who made the objection and took the matter to court will bear no costs, other than a few thousand euros in legal costs. So, what do they have to lose?

My view is that if the objecting contractor does not succeed in court, they should pay the cost of the delay, which may amount to several million euros, as compensation to the state for its unjustified objection. Therefore, anyone who has an objection must submit a bank guarantee guaranteeing the payment of compensation.

The problem does not only arise in infrastructure projects, but also in other more important ones.

We also have the various parties who submit objections based on environmental and other issues. The new road from Paphos airport to Paphos has been half completed for the last six years. Unless objections are fully justified, they should be costed and those who make them should bear the responsibility of compensating the state for the cost of the delay, even if the objections are made by government departments. Should the  employees of the department not bear personal responsibility?

The same goes for the objections to the Tseriou Avenue project that were aimed to help the interests of certain shopkeepers. Who will be responsible for the delay of the project, especially when the EU funds for it have been lost?

A similar concern occurs in architectural competitions, where a specific budget is given, on the basis of which the tender is won, but then this amount is far exceeded. So, is the architect who won the competition not responsible, and why should they be awarded the work if they exceed the budgeted costs?

We must all be held responsible as without repercussions there is nothing to stop objections that end up costing the economy millions.

Antonis Loizou & Associates EPE – Real Estate Appraisers & Development Project Managers, www.aloizou.com.cy, [email protected]

The opinions expressed are solely the author’s and do not necessarily reflect those of the Cyprus Mail