The state has lost more than €5 million in fees from six pleasure boat mooring areas that have remained unused since they were granted to private companies in 2018, the audit office told MPs on Thursday.

The companies were given permission to develop the sites and were supposed to pay the state annual fees ranging from €75,000 to €262,000.

However, they asked for the payments to be suspended until they obtained the permits needed to build and operate the mooring areas.

Eight years later, none of the six sites is operational and the state has not collected any fees.

The audit office said the situation had resulted from bureaucratic delays in changing the law and a failure to properly monitor whether the companies were meeting their obligations.

The six sites were granted by a cabinet decision in 2018 in Peyia, Alaminos, Ha Potami, Pachyammos and Softades.

They are smaller than marinas and are intended to provide berthing for up to 150 pleasure boats.

The companies were required to obtain planning and environmental permits before they could begin operating.

The legal service advised in 2021 that the companies would not have to pay the fees until the necessary permits had been obtained.

It also said the existing system for charging the fees was unconstitutional and that the law should be changed.

The audit office later asked for the issue to be reconsidered and received the same legal opinion, with the fee system described as “burdensome and unconstitutional”.

The audit office has now recommended that the law be changed so companies pay a lower annual fee while their sites remain reserved.

The fee would be based on the value of the area and would encourage companies to obtain their permits and proceed with the projects.

It also wants authorities to be able to cancel concessions when companies fail to meet their obligations and to set a maximum period for which a site can remain unused.

An amendment bill currently under consultation proposes an annual fee of €10,000 for each site until the required permits are obtained.

The audit office said this figure does not reflect the value of the areas and would not give companies enough incentive to move ahead with the projects.

Deputy tourism ministry representative Olga Theocharous confirmed that none of the six mooring areas was operating.

She said current law did not give the ministry the power to cancel the concessions or act against the companies.

Akel MP Christos Christofides called it “another major looming scandal” and alleged that some of the beneficiaries had privileged relations with the Anastasiades government when the concessions were granted.

Diko MP and committee chairman Zacharias Koulias called it a “huge scandal that does not honour anyone in our country”. He said the concessions had been granted under “cloudy and ambiguous terms”.

Disy MP Giorgos Pamborides criticised the state’s “inaction”, recalling the need to change the law having been brought up in 2023, an amendment decided on in 2024, a bill completed last year before being put out for consultation.

Alam leader Odysseas Michaelides said the six companies should have paid about €800,000 a year in total and that the state had now lost more than €5 million.

The committee has requested cabinet minutes and other documents from the deputy tourism ministry and the land registry, including information on land transfers around the six sites.