The Auditor General has issued a damning report on the Cyprus Ports Authority’s handling of a contract to build a mooring facility and install two underwater pipelines for liquefied petroleum gas at Vasilikos, highlighting mistakes and delays that echo the failed LNG terminal project.
Andreas Papaconstantinou said on Tuesday it was troubling that errors, omissions, failures and delays by ports authority officials were comparable to the major fiasco of the LNG terminal construction in the same area, for which the Natural Gas Public Company (DEFA) was responsible.
The ports authority took on the project, deemed urgent and crucial to state energy policy since 2021, but it remains unfinished at the end of 2025 with significant cost increases from initial estimates.
The auditor general noted that initial discussions about building the mooring and two LPG pipelines began in 2015, but the cabinet only approved the project on 27 October 2021, designating it urgent.
However, the contract with a contractor wasn’t signed until June 2024, with the work scheduled for completion in August 2025—a deadline that has been missed.
Papaconstantinou stressed that only 8% of the time (10 months out of 120) involved actual implementation, whilst the remaining 92% was spent on discussions and preparation. In the end, those discussions, preparation and planning were marked by significant failures.
Although 18 months were spent preparing documents before the tender was issued, changes were made to the original documents after the tender announcement, the auditor general said.
The most substantial changes were doubling the contract duration from five to 10 months and revising the estimated cost upwards by 12.2% just 11 days before the tender deadline.
This raises questions about the entire preparation process, the report said, whilst also raising concerns about whether the changes deterred other serious economic operators from submitting bids—similar to what happened in 2018 with DEFA’s tender for the major LNG terminal project at Vasilikos.
Two flawed bids
The auditor general observed that the two bids received had serious grounds for rejection, so the tender should have been cancelled and reissued, which didn’t happen. The audit service had requested exactly this in 2018-19 for the LNG terminal project, but was ignored.
Papaconstantinou added that 10 months after work began, when the project should have been completed, payments for work done amounted to roughly 50% of the net contract amount.
After the contractual completion date of 2 August 2025 passed, the ports authority instructed the contractor to change the pipeline route without first securing approval from the Central Committee for Changes and Requirements, with significant time implications expected.
As a result, construction of the project—deemed critical in terms of completion time—is progressing with an indefinite timeframe and budget, he said.
Similar to the LNG terminal at Vasilikos.
The project cost based on the contract is 28.7% higher than the initial estimated value and 14.7% higher than the final estimated value. Failure to complete the project on time and the pipeline route change are expected to lead to further cost increases, the auditor general warned.
He concluded: “Without disregarding the project’s particularities, its implementation progress represents a characteristic case of the state’s inability to implement an essential development project quickly, effectively, within planned timeframes and within estimated cost.”
The ports authority responded extensively to the audit service’s observations, with its full response included in Appendix 3 of the report on the service’s website.
Overall, the authority said it takes the observations into account and is taking measures to correct procedures and revise decisions for current issues and future tenders.