Concerns over the leasing of state-owned forest land dominated a discussion at the House audit committee on Thursday, as MPs examined the auditor general’s 2023 report on the Department of Forests.
The auditor general, Andreas Papaconstantinou, said the document was a special compliance audit reviewing whether the department followed up on recommendations issued in 2017, alongside additional complaints. He said particular emphasis was placed on cases involving leases of state forest land.
Foini adventure park lease doubled without supporting paperwork
Presenting key findings, the Audit Office’s director of audit, Akis Kikas, referred to a 2014 application for an adventure park in Foini, initially seeking a lease of 20,000 square metres.
He said the application submitted to the Council of Ministers ultimately concerned 40,000 square metres, with no additional application or justification for the change identified during the review. He added that no works have yet taken place at the site.
Kikas also referred to a separate case involving plans for a campsite in the Machairas forest by a private association called Friends of the 72nd Scout Group, which he said has no connection to the Scouts movement.
He said an environmental authority issued a reasoned assessment in March 2021 that did not mention the presence of a protected water snake species in the area. The case later advanced to planning procedures and a lease was approved by the Council of Ministers in 2022 for public benefit purposes that, he said, were not adequately documented.
Polemidia special school lease advanced despite forestry objections
Another case concerned a lease in the Polemidia state park for the construction of a special school. Kikas said the Department of Forests held a negative position, but the Ministry of Education proceeded to submit a planning application and assign the project to a contractor, with the request continuing through the process.
Ayia Napa hotel leases and rent calculation disputes
Kikas also referred to leases of state forest land for hotel developments in Ayia Napa, including one hotel dating back to the pre-1974 period and four additional cases where contractual weaknesses were identified, including issues recorded in earlier Audit Office reports.
He said a 2019 legislative change repealed an older method for calculating lease payments, prompting the Department of Forests to seek legal advice. The Legal Service, he said, advised that agreements could be modified only with the consent of both parties, recommending that market rent be calculated and, if not accepted, that the matter proceed to arbitration.
Kikas further referred to a hotel unit in Troodos that rejected a rent revision, went to court and won, as well as an ongoing case involving a lawsuit over alleged unlawful occupation of premises in the Akamia forest, where eviction proceedings are under way.
Environment department: issues span years and require better coordination
The director of the Environment Department at the Ministry of Agriculture, Costas Constantinou, said the report covers the period 2018 to 2024, while some issues date back to 2014 and others even to the 1970s.
He said improved internal communication between departments is needed and pointed to delays in responses from the Department of Lands and Surveys regarding the processing of lease requests. He also said discussions have taken place with the Ministry of Interior on whether general valuation could be used for lease calculations.
On the Foini adventure park, Constantinou said a new application should have been requested to reflect the increased area. On the Polymidia special school, he said all data were considered and an interministerial committee weighed the issues before reaching a different decision.
On Ayia Napa hotel leases, he said some contracts date back to the 1970s and can be changed only by mutual consent. He added that the 2019 law introduced an alternative way of calculating rent with broadly similar results, and that contacts with hotels will begin to explore whether market rents can be achieved.
Department of Forests: templates introduced, some contracts later cancelled
The director of the Department of Forests, Savvas Iezechiil, said the department accepts the report’s recommendations and is working to improve procedures.
He said standard contract templates for all types of leases have been developed since 2017 and regular meetings have been established with the Lands Department and relevant branches to address issues as they arise.
Commenting on individual cases, forestry department representative Antonis Chorattas said a document from the initial meeting on the adventure park was missing from the file. He said the department later expressed a positive view following consultations and correspondence, adding that the interested party has paid €100,000 in market rents since 2015 but the project has not proceeded as permits remain pending.
For the Machairas case, he said all aspects were examined and a contract was signed, with a building permit application advancing. He said the protected water snake issue was later identified and it was decided the area would be affected, leading to cancellation of the contract.
On the Polymidia special school, he said the Ministry of Education proceeded with plans without consultation with the Department of Forests, which he described as a negative development.
Legal Service: ambiguity cannot void contracts, arbitration possible
A Legal Service representative said a legal ambiguity arose after the 2019 repeal of the earlier rent calculation law, but this cannot lead to cancellation. The representative said consultation remains necessary, and arbitration mechanisms are available if agreement cannot be reached.
Audit committee: contracts to be submitted for further scrutiny
After the meeting, the committee chair, DIKO MP Zacharias Koulias, said issues were raised concerning five hotels in Famagusta district.
He said the committee requested that all contracts be submitted and that they will be reviewed at a new meeting in the presence of the Legal Service, with the aim of correcting issues where possible. He said other forestry department agreements will also be examined one by one, noting that the scope of the issues was too extensive to conclude in a short session.
Koulias said safeguarding forest land is the key priority and noted that leases also exist within cities and in coastal areas. He added that some contracts were signed in different periods and circumstances, including in the Kokkinochoria area, and argued that forest services should focus on forests rather than projects unrelated to forest management.
He also highlighted the reopening of the Forestry College, with 25 students last year and 25 this year, and said the aim is to reach 100 students, including from the Commonwealth, as was done previously.
Calls for legislative changes and market-based rents
DIKOParty Cooperation parliamentary spokesperson Alekos Tryfonidis said the Audit Office report points to significant shortcomings in good governance and that the state is losing substantial revenue from leasing state forest land, whether to hotels or other private users.
He said his party asked the Legal Service to assist the Ministry of Agriculture and the Environment Department in preparing changes to legislation and regulations so that private users pay market-based rents. He warned that if the state does not bring a bill within a month, his party will proceed with a legislative proposal to require those leasing state land on long-term terms to pay current market rents.
Attalidou: leases without documentation and weak Natura oversight
Nicosia MP Alexandra Attalidou said the auditor general clearly records serious omissions, including leases granted without adequate documentation, procedures advanced without complete environmental assessment and insufficient oversight, including in Natura 2000 areas.
She said Cyprus is before the European Court because, out of 37 Natura sites, only nine have adequate protection measures. She also referred to a recent incident involving the cutting of mature black pines within a Natura area, saying it has not been publicly documented that mandatory environmental procedures were followed.
Attalidou said she submitted a parliamentary question to the competent ministry and is awaiting answers, adding that information suggests a former official may be involved, which, she said, raises questions of institutional credibility and impartiality.
She said Akamas, Troodos, Foini and Machairas are all symptoms of the same problem, stressing that Natura protection is a legal obligation, not an option. When mismanagement or lack of transparency is documented, she said, it amounts to institutional failure and exposes Cyprus environmentally, institutionally and economically.
Source: CNA