A series of serious problems in the tendering, evaluation and implementation process of the project for the construction of a mooring facility and two underwater LPG pipelines in the Zygi–Vasiliko port area has been identified by the Audit Office of Cyprus.
The project, which was classified as urgent and critical for the Republic of Cyprus’ energy policy, appears to have developed in a manner that raises questions regarding preparation, competition, bid evaluation and implementation progress.
Significant delay before the project even began
The study was assigned in 2021, while the tender was launched 1.5 years later, in January 2023. Despite its urgency, between the announcement and the deadline for bid submission, six amending circulars were issued and three deadline extensions were granted—pushing the final date forward by two full months.
The Audit Office of Cyprus considers the scale of changes to be indicative of insufficient preparation and potential discouragement of economic operators from participating.
Notably, although the initial implementation period was set at five months, the Cyprus Ports Authority later increased it to ten, effectively admitting that the original timeline was unworkable.
“A major redesign of the pipeline route was ordered without essential approval — a move with severe economic and time consequences,” the report cautions.
Cost estimate increased shortly before deadline
The CPA increased the project’s estimated value from €4.1 million to €4.6 million just 11 days before the submission deadline, and with the final contract award, the project was signed at €5.278 million—28.7% higher than the original estimate.
Only two bids – both problematic
Only two offers were submitted. According to the report, both presented reasons for rejection:
– the bid bond of one economic operator expired before the required date,
– and both bidders reportedly failed to fully meet the experience criteria.
Nevertheless, neither the Evaluation Committee nor the Board of the CPA rejected the bids, meaning the tender was not canceled as good practice would require, but continued with evaluations, objections, and appeals.
Change of contractor following appeal
Initially, in December 2023, the CPA awarded the tender to Economic Operator A. After an appeal by the second bidder, temporary measures were imposed, leading to procedural delays.
Eventually, because Operator A set conditions regarding extension of its offer, the Authority proceeded with its rejection and awarded the project to Operator B—even though its bid was more expensive.
The contract was signed in June 2024, 17 months after the tender was announced.
“Despite being labelled urgent, the project has stalled, with progress far below what was promised,” the report states.
Minimal progress on site
Despite the “urgent” designation, work began three months later than the contract signing date.
Seven months into implementation, only 43% of the contractual scope had been completed, whereas the projected progress should have been around 62%.
Ten months later, when the project should have already been delivered, progress was approximately 50%.
The Audit Office of Cyprus notes that no requests for extension had been submitted to the Central Committee for Changes and Claims, while instead the CPA instructed the contractor to alter the routing of the pipelines without the necessary prior approval.
This change is expected to have major financial and scheduling implications.
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