Audit office supports Paphos mayor over ‘unacceptable’ airport (updated)

The Audit Office on Tuesday added fuel to the fire after Paphos mayor Phedonas Phedonos once again criticised the city’s airport, speaking of “unacceptable manipulations” on behalf of the former government regarding the concession agreement for its development and management.

The previous night, Phedonos posted a number of videos on social media showing queues spilling out of the airport as people waited to enter passport control.

“It’s tragic what is happening at Paphos airport tonight, but also very often,” he said. “Some people need to be held accountable.”

In a written statement, the Audit Office said that under the previous government, the interior ministry, “without being the contracting authority, marginalised the competent transport ministry, and with its permanent secretary as the head of the negotiating team, preliminarily adopted the unacceptable positions of the operator [Hermes] on bundling.”

The government watchdog was criticising the bundling of three issues: the express contractual obligation of the company to expand the airports to increase their capacity (so-called Phase B), the “illegal” extension of the concession agreement by 5.5 years (with no-bid contracts for services with gross revenues of €1.5 billion), and the various financial claims on both sides – the government and the airport concession holder.

“The scandalous preliminary agreement that was made served the company and would lead, among other things, to huge delays for Phase B since, due to the 5.5-year extension provision, the agreement required approval from the European Commission which, if granted, would take one to two years,” the statement said.

It also noted that with the approval of President Nikos Christodoulides, who supported their effort, the current ministers of transport and finance transferred the responsibility of the project back to the transport ministry.

The ministry now follows the correct position that Phase B is already long overdue and should be pushed forward as a matter of priority, regardless of any other differences between the parties.

“The illegal preliminary agreement for a 5.5 year extension is no longer on the table,” it explained.

The mayor’s posts “prove the tragic situation in which the interior ministry has allowed the state to find itself with its unacceptable manipulations,” the statement stressed, agreeing with Phedonos that accountability should be a given.

However, “accountability becomes problematic due to the attorney-general’s dual role – on the one hand the AG, as legal advisor of the Republic was aware of the finance ministry’s actions and was providing legal advice and guidance; but on the other hand, as a public prosecutor he is duty-bound to assist in holding to account those whom he had advised.”

In effect, the Audit Office was accusing the prior administration of Nicos Anastasiades of botching negotiations with Hermes, the company with the concession to run the island’s two airports. This, it argues, resulted in the problems now seen at Paphos airport.

In September last year the Anastasiades government pulled out of talks with Hermes concerning the extension of the airports concession. The administration at the time cited the “toxic climate” created after allegations by the auditor-general that the government had bungled the talks, to the detriment of taxpayers.

At the time a source knowledgeable about the affair told the Cyprus Mail that the Anastasiades administration had “kicked the can down the road” – meaning leaving it to the next government.