Vasiliko LNG project terminated
After endless wrangling, the Vasiliko liquified natural gas (LNG) project was pronounced dead on Thursday by the Chinese-led construction firm CPP-Metron Consortium Ltd (CMC).
In a statement, the firm slammed Natural Gas Infrastructure Company (Etyfa) charging it for leaving CMC to work “without proper or timely payments” for years.
“CMC has found itself with no alternative but to terminate its contract with ETYFA for the LNG Receiving and Regasification Terminal project at Vasilikos and has done so today, July 18th.”
Energy Minister George Papanastasiou told the Cyprus Mail that at this stage the “one-sided termination of the agreement from the Chinese consortium will be studied.”
Etyfa will revert with its own announcement, he specified.
The project has been a bone of contention for months, with an audit office report earlier this year describing its management as nothing short of “tragic”.
It identified the project has cost taxpayers €542 million due to the increased cost of delays in a process riddled with inaccuracies and serious violations of public contracting that could even involve criminal responsibility.
Since the signing of the contract in December 2019, the CPP has submitted four delivery timetables – September 2022, July 2023, October 2023 and July 2024.
The contract was awarded in 2019 with a 24-month deadline for completion.
CMC said “the position has become untenable. Contrary to the promises that were made by the [energy] minister in March, CMC has still not received any payment whatsoever for its work in 2024.
“That is but the latest failure in a four-year history characterised by wrongful withholdings and delayed payments. No contractor can be expected to work indefinitely on credit. That was not the deal that CMC signed up to. It was not the deal that the EU agreed to fund.”
Earlier this month, Energy Minister George Papanastasiou warned the contract was heading towards termination, describing the negotiations between Etyfa and CMC as tough.
He said the extensions given to the consortium indicated that there was no end date for completion.
In January this year, CMC submitted a statement of claim before a London arbitration court seeking to claim increased costs from the Republic of Cyprus due to technical problems and delays surrounding the project.
Efforts to resolve the issue involved President Nikos Christodoulides meeting with the Chinese ambassador to Cyprus in May, with the meeting lasting two hours.
More later…