The European Public Prosecutor’s Office (EPPO) has moved to open the bank accounts of politicians, current and former state officials, and public servants under court orders, as part of its investigation into the tender for the construction of the liquefied natural gas (LNG) import terminal at Vasiliko.
The probe concerns possible fraud, misuse of EU funds, and corruption during both the tendering process and the management of the project, which secured €101 million in European financing.
According to information obtained by Politis, the EPPO sought and obtained orders from the Nicosia District Court to lift banking secrecy and access a number of accounts in search of bribes. The information gathered has already produced several important findings, with transactions currently under analysis at EPPO headquarters in Luxembourg.
Independent investigations
The EPPO operates independently and does not take instructions from EU institutions or national governments. Regulation (EU) 2017/1939 stipulates that its members neither request nor accept directions, allowing them to investigate corruption cases that often involve high-level political and economic interests.
In Cyprus, the criminal investigation into Vasiliko is being conducted by a police team working directly under the guidance of the EPPO office in Nicosia. Neither the Chief of Police nor the Attorney-General and Deputy Attorney-General, Giorgos Savvides and Savvas Angelides, are informed of or involved in the proceedings. They will also have no role in any decision on criminal charges. Should indictments arise, they will be filed directly before Cypriot courts by the EPPO.
Testimonies and documents
Investigators have gathered hundreds of files from ministries, government departments, and the Natural Gas Infrastructure Company (ETYFA), which managed the contested tender. ETYFA is a subsidiary of the Natural Gas Public Company (DEFA) and the Electricity Authority of Cyprus. Several depositions have been taken. Politicians and officials under scrutiny for corruption will testify last.
Looking back eight years
The tender for the study, construction, operation, and maintenance of the LNG terminal was announced on 5 October 2018, with an estimated value of €500 million plus VAT. Investigations, however, stretch back as far as eight years, examining the actions of those who initiated the tender process that led to a single bidder: the CPP-METRON consortium, dominated by Chinese interests.
To this day, the project remains unfinished, leaving Cyprus in a state of energy uncertainty, with supply issues and consumers hostage to high electricity prices. Citizens continue to bear the cost of mismanagement through their electricity bills, while CPP-METRON abandoned the project in May 2024.
Damning audit
The EPPO launched its investigation following a report published on 19 January 2024 by the Audit Office of the Republic of Cyprus, which identified possible irregularities in both the tender process and project implementation. The European Court of Auditors and the European Climate, Infrastructure and Environment Executive Agency also forwarded findings to the EPPO. After reviewing these reports, the EPPO decided to proceed with a formal probe.
The Audit Office highlighted several major findings:
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Limited competition. The tender process failed to secure adequate participation or sufficient competition, with only one valid bidder reaching the evaluation stage.
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Serious violations. Grave breaches of public procurement law were detected during evaluation. These included irregularities by the bidder accepted by ETYFA, and irregularities committed by ETYFA itself. Despite the Audit Office’s recommendations that these should have led to disqualification of CPP-METRON, ETYFA awarded the contract citing urgency.
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Favourable treatment. ETYFA repeatedly covered for the contractor’s serious delays, assuring authorities that measures were being taken and deadlines met. The most striking case was ETYFA’s recommendation to approve an additional €25 million payment to the contractor due to steel price increases, despite the contract containing no such provision. The Audit Office strongly objected, yet the request was approved, effectively granting a ten-month extension and waiving ETYFA’s right to impose penalties for unjustified delays.
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Other irregularities. Additional serious findings suggested potential disciplinary or even criminal liability, including irregularities in approving completed works, invoices, payment certificates, and subcontractors.
The Audit Office concluded that repeated favourable decisions towards the contractor ultimately jeopardised the project’s completion, an assessment borne out by the consortium’s departure and the unfinished state of the terminal.
Attorney General clarifies EPPO’s role in LNG terminal investigation
The Attorney General of the Republic clarified that no national authority in an EU member state may launch its own criminal investigation once the European Public Prosecutor’s Office (EPPO) has assumed competence in a case, according to CNA.
His statement came amid political debate over the LNG import terminal project in Cyprus. As CNA reported, the EPPO informed the Attorney General in March 2024 that it had opened a criminal investigation under Article 26 of Regulation (EU) 2017/1939 into possible offences involving the contracting authority, the contractor, or other parties linked to the project’s tendering and execution.
CNA further noted that under Article 25 of the same regulation, when the EPPO exercises jurisdiction, national authorities are barred from parallel investigations into the same conduct. If aspects of a case fall outside its remit, the EPPO is obliged to notify the competent national authorities.
The Attorney General also addressed criticism of the Legal Service’s presence at a recent House Energy Committee meeting, explaining that he was represented by a senior State Prosecutor, head of the Public Procurement Division, who he deemed the most appropriate official to attend on his behalf.