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Daily News Review – 25/01/2019

In today’s press:

Massive deficit instead of surplus in 2018

Weekly newspaper 24H refers to the figures announced earlier in the week by the Statistical Services and Eurostat, revealing that the general government recorded a deficit of €723.1m in the first nine months of 2018, compared with a €326.9m surplus in the first six months of 2018, which has been attributed to the massive burden of the Hellenic/CCB deal that was passed on to the taxpayers. The paper adds that the opposition parties have cornered the government over the results, particularly main opposition AKEL, which accused the government of once again lying about the HB/CCB deal having a positive fiscal impact.

Profits for CSE Index

The Cyprus Stock Exchange recorded profits on Thursday, with the General Index rising 0.47% and closing on 62.62 units, and the FTSE/CySE 20 Index recording a profit of 0.48% reaching 37.49 units. Bank of Cyprus shares garnered the keenest investor interest, with a trading volume of €860,333 (up 0.66% – closing price €1.215), followed by Hellenic Bank with €54,381 (down 1.13% – closing price €0.702).

The money is there! Why are we not collecting it?

One of the biggest longstanding weakness of the Cypriot state and its tax authorities is the failure to collect outstanding payments, Alithia newspaper reports. The problem is growing by the year, despite repeated assurances by the authorities that they will deal with the matter. And all this at a time when the state has massive needs. The Auditor-general’s annual report for 2017 was made public yesterday, revealing that there were €2.5b outstanding debts, of which €857.1m are precarious; that is, they cannot be collected either because the debtors are deceased or they went bankrupt.

3,000 Bank of Cyprus borrowers to join Estia

Bank of Cyprus customers have been showing a keen interest in the Estia scheme, after receiving the relevant letters from the bank. According to data released by BoC, it has sent letters to 4,320 customers and has heard back from 3,790, which is 87% of the total. Of the latter, 2,980 have expressed interest in joining the Estia scheme, which is 68% of the total, or 78% of those who responded to the BoC’s letters.

€25m returned to finance private RES

The Council of Ministers yesterday approved a scheme aimed at significantly improving infrastructure for Renewable Energy Sources (RES) in Cyprus, at a total cost of €25m, as part of the RES Fund’s budget for 2019. The project will not be financed by the Fund itself, but instead by the contributions that households have been paying as part of their electricity bills over the past two years.

OEV proposal ignites reactions

Leaked information that the Employers and Industrialists Federation (OEV) is planning to propose a postponement of payments to the General Health System until the disputes with the doctors and private hospitals have been ironed out, have created a lot of tension over the past few days. The Health Ministry and Health Insurance Organisation have made it clear that they will not accept this, and that the GHS’ implementation is a one-way road.

New investments by DP World Limassol

DP World Limassol has acquired a range of new equipment as part of an ongoing upgrade of the Limassol port infrastructure. A new, high-tech mobile harbour crane, and a reach stacker have been recently added, to speed up operations and upgrade of the infrastructure at the Multi-purpose port terminal. The new equipment will be used for the loading and unloading of general cargo, break bulk and oil and gas equipment, enhancing the efficiency, productivity and safety of port operations and reducing vessel turnaround time. In addition to making loading and unloading faster and easier, the operator compartment of these new machines has been ergonomically designed to provide good sight lines, better working comfort and environmentally friendly with low emissions and noise levels. The recent acquisitions underline DP World Limassol’s commitment to continually investing in the port delivering innovative and sustainable services, while at the same time continue to improve customer satisfaction.

Misappropriation of funds at Limassol port

Auditor-general Odysseas Michaelides yesterday made his Office’s annual report for 2017 public. In one of his observations, Michaelides refers to a systematic misappropriation of funds from the fees to inspect and control imported foodstuff at Limassol port. The sum of the embezzlement is quite small at €11,935, he said, but it is being recorded due to the nature of the discrepancy.

€857m up in air

Phileleftheros newspaper reports on the topic above, as part of a more detailed presentation of the Auditor-general’s 2017 report (more detailed coverage in ‘Economy’ section). The paper focuses on the revelation that the Tax Department is owed €857m in unpaid taxes.

Original contract between state and Hermes has been lost

As above, with the paper focusing on how the Auditor-general spotted some serious weaknesses by the state to have control over the concession agreement it signed with Hermes for the management of the island’s two airports. The report reveals that the original contracts that were signed between the two parties have been lost, and that Hermes has been operating for eight years without being checked.

President has forgotten the squandered billions

Main opposition AKEL yesterday highlighted five separate cases relating to the squandering of billions in public funds, which were revealed in the Auditor-general’s 2017 report. Its spokesman, Stefanos Stefanou, said these included the “sell-out” of the Cyprus Co-operative Bank, as well as the “millions the state has lost in losses from the privatisation of Limassol port”.

“Privatisations and the example of Limassol port”

The Citizens Movement Against Privatisations and Political Austerity is organising a workshop on “Privatisations and the example of Limassol port”, at the Journalists House in Nicosia on Saturday, 26 January, at 9am.

The deputy ministry will not wait around for the Israelis

The tenders for embellishment works at Larnaca marina, which will be funded by the Deputy Ministry for Tourism, will be opened soon. Even though the state is in negotiation with an Israeli consortium and has received a bid to develop Larnaca port and marina which it is currently assessing, the deputy ministry decided to go ahead with the embellishment and improvement works at the marina. According to Politis newspaper’s sources, even if the state reaches an agreement with the consortium, it is estimated that it will take 2-3 years until the transfer of all the areas in the port and marina from the Cyprus Ports Authority to the strategic investor is completed. So, the deputy ministry has decided to fund €200,000 of improvement works.

Brexit “brings” shipping companies to Cyprus

Cyprus stands to gain from Brexit, as evident from the decision of British shipping company P&O Ferries to register its ships under the Cypriot flag, fearing a negative impact of a potential no-deal exit.  The move was welcomed by the Deputy Ministry of Shipping, which said that this was a very positive development, and that the Cyprus flag belongs to the white list and is considered as one of the best-quality flags worldwide.

Works for Casino started without a Project Supervisor

The government is trying to release a €190K budget line for the purchase of the services of a project supervisor and a team of advisors that will oversee the construction of the casino. Last year the members of the House finance committee were able to release a budget line (€186K), but due to the fact that Casino-related matters were transferred under the authority of the newly-established Deputy Ministry of Tourism, the budget line was never spent. The project supervisor will be overseeing the works for the construction of the Limassol casino, with a view to safeguard the investment. The budget line will be gradually spent by the Deputy Ministry of Tourism. As the Deputy Ministry states in a memo, the purchase of services of a Project Supervisor as well as the team of advisors is imperative in order to support the coordination committee with regards to monitoring the construction works and in order to ensure that the contractor honours their obligations. The memo concludes by demanding the immediate release of the funds, since the construction works for the casino are currently proceeding without any supervision.

10 co-funded projects worth €2.3m

10 co-funded projects with total cost €2.3m, will start being implemented in 2019.  According to information that was given to the Parliament, projects that are co-funded by the European Union and the Republic of Cyprus, also include a large number of studies. One of the largest projects include, the development of a comprehensive sustainable urban mobility plan for Limassol (€751.431, of which €330K will be spent this year). Another project is the development of a comprehensive sustainable urban mobility plan for Larnaca. The study started in 2017 and will be completed this year with a total cost of €428.490 (of which €300K will be spent this year).

Linear park to reach occupied areas

The Pedieos River Rehabilitation Project, the extension of the Morphou and Famagusta wastewater treatment plants and the establishment of green waste composting facility in Nicosia are among the projects that are ready for implementation, starting early 2019, the European Commission announced. It is noted that the European Commission recently completed a detailed feasibility study for the rehabilitation of the Pedieos River. The scope of the study includes the construction of a linear park along an approximate 5 klm length of the river consisting of flood protection measures, cycling and walking paths, recreational areas and environmental educational facilities.

Deputy Ministry of Tourism inherits disciplinary investigation

The Cyprus Tourism Organisation passed on an unresolved disciplinary investigation to the Deputy Ministry of Tourism, which concerns the CTO’s head of the Accounting. The reason was the delay in the submitting the Organisation’s financial statements to the Parliament.

Shift to sustainable developments necessary 

The Vice-President of the CFA Society Cyprus, argues that Cyprus needs to focus on long-term and viable projects, that will guarantee repeated revenues, so as to create an environment of stability without important cyclical fluctuations. She argues that as it concerns sectors in which the Cypriot economy is already active, such as tourism, agriculture, stockraising, shipping, the pharmaceuticals industry and services sector, Cyprus should focus on the offer of a high level of products and services.

An especially difficult year for hotels

Hotel owners estimate that the current year will be especially difficult, since they appreciate that tourist flows will be reduced by 15%-20%. Even if the year has just begun, the first contacts with tour operators demonstrate a negative outlook for 2019. Hotel representatives in the four coastal cities of Cyprus, have told Stockwatch, that the new tourist season will not be an easy one due to the complex exogenous environment.

2,005 vacancies with salaries ranging from €750- €6K

24H reports that more and more job positions are being announced, giving the opportunity to unemployed people as well as people looking for a better opportunity to apply. In most cases, the article goes on to say, these jobs offer prospects for career development as well as job security, since most of them are permanent. The newspaper reports that by last Saturday, more than 2 thousand vacancies were available, offering monthly salaries from €750 to €6.000. In some cases, jobs require speaking languages other than English and Greek, such as Russian and German. Companies looking for staff include Cyprus’ biggest companies, such as EY, KPMG, Deloitte as well as Cyprus Casinos.

OPAP: Competition only for show

Preparations for a new agreement between the RoC and OPAP are proceeding, with the coordinating committee preparing for a due diligence procedure for OPAP. As he the Minister of Finance has reported the competent coordinating committee which manages the procurement procedure, for the provision of lucky games in the Republic of Cyprus, has prepared the documents for an open competition that will be announced by the Ministry of Finance, as soon as the necessary funds have been secured in the 2019 budget. The article argues that the bill that was passed in May 2018 revealed that OPAP would be the winner of the competition, since any amendments were made with OPAP in mind.  The article argues, that the decision had already been taken since OPAP is the sponsor behind all political parties. The article also reports that OPAP owes €100.000 to the state and that the amount will be settled in an out-of-court procedure.

GHS will be implemented despite objections, says HIO president

HIO President, Thomas Antoniou states that the Health Insurance Organisation (HIO) will proceed to fully implement the General Health System, despite difficulties. Antoniou goes on to say that the President of the Republic as well as parties believe that the HIO needs to proceed with the timeframes that were initially defined. In addition to this, he stated that current problems will be overcome along the way. He thinks that doctors are not well-informed about the system, and he says that the HIO is trying to overcome this issue. Called to comment on OEV’s recent remarks that contributions to the GHS should be postponed, Antoniou said that this cannot happen because contributions are a main part of Roadmap for the implementation of the GHS.

OKYPY contracts include 15% increase

The article states that the budget of State Health Services Organisation (OKYPY) amounts to €68.729.480. OKYPY’s officer Charalambos Charilaou referred to the incentives that will be given by to state doctors with an estimated budget line of €1.2m. Each personal doctor will receive €10 for each beneficiary who will register in their list. Specifically, doctors will receive a yearly raise of up to €25.000. Charilaou also referred to the 15% increase included in the OKYPY contracts, noting that on average each doctor will receive an additional €8.000 annually. 40 clerks, 20 doctors, 60 nurses and 175 health care providers will be recruited in state hospitals. According to OKYPY’s budget the Chairman of the Board will receive an annual salary of €40.000, while two members of the board who are not based in Cyprus will receive an annual salary of €30.000. The CEO of the Organisation will receive an annual salary of €96.491. The CFO of the Organisation will receive €86.740 annually.

GHS timeframe will not change

Minister of Health, Constantinos Ioannou and the president of the Health Insurance Organisation, have said that the GHS will be implemented according to the timeframe that has already been defined, following rumours that the Employers & Industrialists Federation’s (OEV) is preparing a proposal to postpone GHS contributions until doctors and private hospitals join the HIO. Constantinos Ioannou, said in a written statement, that he understands OEV’s concerns and that it wants to safeguard the interests of its members. However, he encouraged OEV to be active in this process as a mediator between the HIO and OEV’s members. Thomas Antoniou, president of the HIO, said that the postponement of contributions is impossible, since the contributions are part of the roadmap towards the application of the new health system.

OEV proposal ignites reactions

Leaked information that the Employers and Industrialists Federation (OEV) is planning to propose a postponement of payments to the General Health System until the disputes with the doctors and private hospitals have been ironed out, have created a lot of tension over the past few days. The Health Ministry and Health Insurance Organisation have made it clear that they will not accept this, and that the GHS’ implementation is a one-way road.


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