‘Strategic Investments’ law passed, raises concerns over ministerial discretion

The House on Thursday passed a law that fast-tracks ‘strategic investments’ and regulates licensing procedures and timeframes, but some MPs decried the discretionary powers given to the minister and senior civil servants.

The bill – initially drafted by the previous government – passed with 34 votes for and 18 against.

Akel pushed through an amendment that struck from the bill a clause that would have allowed the cabinet to issue a license for a project deemed ‘strategic’.

Under the law as passed, a Strategic Investments Sector will be established as the single licensing authority – issuing building permits within a year at a maximum from the date of the application.

The legislation also sets in place a mechanism for classifying an investment as ‘strategic’ according to specific criteria.

It also creates the position of project manager, who will act as the point of contact between the applicant (the investor) and the relevant government services.

The stated aim is to centralise the licensing process and cut down on bureaucracy.

The law also provides for feedback from the Department of Environment for certain projects.

Speaking on the House floor, Akel MP Aristos Damianou said the core issue related to striking a balance between entrepreneurship on the one hand, and sustainable growth and respect for the environment on the other.

Whenever powers are concentrated within one person – such as a minister or the head of the Town Planning Department – the danger of “distortions” is very real.

In her own remarks, Greens MP Alexandra Attalidou said opposition parties tried to insert amendments that would boost transparency and accountability.

While the Greens do not shun investments and growth, these should give added value to the economy and serve the common good – not just the interests of some land developers.

Attalidou went on to describe certain clauses of the bill – such as the position of project manager, or the authority vested in the cabinet to grant derogations – as “institutionalised corruption.”

Dipa’s Marinos Moushiouttas said passage of the bill was a precondition for the disbursement of funds to Cyprus from the Recovery and Resilience Fund.

‘Strategic’ investments are those which amount to €20 million, of which at least 75 per cent stems from primary capital such as new, liquid, and available funds directly linked to the projects.

Alternatively, the investment must create at least 80 permanent job positions of any kind, or 50 new positions with an annual salary exceeding €1.5 million.

Finally, the third option is a €15 million investment of which at least 75 per cent stems from primary capital and creates 30 new permanent jobs.

Additionally, strategic investments could be anchor companies, being a well-known multinational of international reputation, which will develop business activity in Cyprus and is listed on relevant international lists like the Forbes 2000, Nasdaq or FTSE 350.