European Commission claims back €68.6m it contributed to Vasiliko project

Τhe European Commission (EC) is claiming a €68.6m refund from Cyprus which is what it has contributed so far towards the storage and regasification of liquefied natural gas terminal project in Vasiliko, the contract for which has fallen through.

The Ministry of Energy, Commerce and Industry issued a statement saying that the EU is seeking back the funds it has paid the Natural Gas Infrastructure Company (ETYFA), as the contracting party to the Agreement, noting that it will reply to the EC’s letter with its positions within 30 days, as per the procedure.

The letter, it added, mentions possible irregularities that occurred during the tender’s evaluation period. These issues concern the evaluation criteria for the consortium China Petroleum PipelineEngineering Co. Ltd., Metron Energy Applications S.A., Hudong-Zhonghua Shipbuilding (Group) Co. Limited and Wilhelmsen Ship Management Limited, it said.

“The letter alleges two substantive violations. The first concerns the criteria for awarding the tender to the consortium in question (December 2019) and the second concerns the signing of the bilateral agreement upon approval of the additional €25m (June 2022),” the ministry said.

The European Commission, as a result of the above, the Ministry said, “claims the refund of €68,608,438.46, which is the European grant that has been paid to date to ETYFA, as the contracting party to the Agreement”. It notes that the project - Cyprus Gas 2 EU - is a Project of Common Interest and was financed with a European grant of €101m.

“Defending the interests of the Republic of Cyprus remains the Government's priority,” the ministry stressed, adding that to this end, it was assisting the ongoing investigation in every possible way, in full cooperation with the European authorities and in line “with the strict instructions” of the President of the Republic for a full investigation into the facts. And it said there will be “zero tolerance” if it turns out the procedures weren’t followed properly.

The Government's commitment is focused, at the same time, on the effort to complete the important energy project in Vasiliko as soon as possible, the Ministry concluded.