Electricity unions raise concerns over feasibility of interconnector project

Four trade unions representing workers in the Electricity Authority of Cyprus (EAC) on Thursday pilloried plans for the EuroAsia interconnector, warning that Cypriot taxpayers may end up getting saddled with even higher electricity bills.

In a joint statement, the Epopai, Sidikek, Sepaik and Syvaik unions said it now looked like the Cypriot state would become involved in what was until now an exclusively private project.

The mooted EuroAsia Interconnector is a subsea electricity cable that would link the Greek, Cypriot and Israeli grids. It is a major ‘Project of Common Interest’ of the European Union.

Last month it emerged that the cost of the Cyprus to Crete stretch of the cable had ballooned by about €400 million – bringing the price tag to nearly €2 billion. Meanwhile media reports suggested the European Investment Bank (EIB) had given the thumbs-down to a €600 million loan request by the project promoter – indicating the project was facing a financing shortfall. However, the EuroAsia project promoter said the EIB has not in fact formally rejected the loan request, and that negotiations are still ongoing. Also, the energy minister hinted that the Cypriot state may become involved, either by underwriting bank loans for the project, or by directly ‘buying into’ the project.

In their statement, the EAC trade unions insisted there are serious doubts about recovering the cost of such a massive project.

“We assess that the state could invest in alternative technologies, at a far lower cost, which would make the island truly green, with security of supply, sufficiency and stability. It is no accident that the European Investment Bank is counter-proposing electrical power storage, which was why it decided not to fund the interconnector.”

The syndicates went on to pose four key questions to the government and to the energy regulator which recently rubberstamped the project.

First, they asked, what will the final cost of the project be on completion, and what impact will a potential government decision to become involved have on state finances and, ultimately, the taxpayer.

Secondly, is the project technically feasible, and can the state guarantee that its operation will benefit the people of Cyprus?

Thirdly, how has the project been designated as ‘mature’ when the quantities of electricity flowing through the cable, to and from Cyprus, have yet to be precisely determined?

And lastly, in what way will excess electricity be produced in Cyprus for export, so as to pay off the cost of the cable?

“In the end, will a special charge be levied on electricity bills because of possible guarantees by the state?”