The Ministry of Finance issues a statement in response to the Audit Office on the acquisition of the Nicosia City Centre building by the Republic.
It sets out the facts and what is included in the agreement, noting that the Acquisition Agreement has undergone a legislative and technical audit and all safeguards have been put in place.
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In detail:
"Audit findings of the Ministry of Finance by the Audit Office for the acquisition of the Nicosia City Centre building by the Republic
With regard to the findings and recommendations in the Special Report of the Audit Office of the Republic, as well as the positions of the Ministry of Finance, the following are noted:
With regard to the issue of the existence of available appropriations in the approved state budget, it is noted that, appropriations were included in the budget of the Department of Cadastre and Land Surveying for a total amount of €45 million. for 2021 and €47 million for 2022, which may, on the basis of the relevant Law and Regulations, be used for this purpose.
Regarding the issue of the need to prepare a Project Note/Sustainability Study for public investment projects, it is noted that, this practice came into force in January 2021, i.e. at a time later than the publication of the Open Call for Expression of Interest to the private sector for the acquisition of buildings, published by the Ministry of Finance on 13.9.2019, through which this building was also proposed. It is noted, in this regard, that, the Invitation was prepared in collaboration with the General Accounting Office of the Republic, in order to ensure compatibility with the relevant legislation.
With regard to the issue of concluding an agreement for the acquisition of the building before obtaining the certificate of final approval, it is noted that, according to an opinion of the Attorney General of the Republic, such action is not inferred to be unlawful, while the whole issue is regulated in the terms of the text of the purchase agreement.
In relation to the finding of the Audit Office that the acquisition of the building was made at a price that was unprofitable for the Republic, it is noted that the valuation of the Department of Cadastre and Land Surveying was calculated at €20.07 million, reduced by 10% due to the size of the building, while the corresponding estimate by the private valuer was €24.54 million.[/B]
It is emphasised that it is government policy, which was also followed in the present procedure, to examine the available alternatives for meeting the housing needs of the public sector in relation to the required costs, opportunity costs and implementation time, with a view to selecting the most appropriate procedure in the interests of the Republic. Therefore, taking all the relevant data into account, it was assessed that, at this stage, the acquisition of existing buildings available on the market is the most appropriate option in the interests of the Republic. To this end, it is noted that the total additional costs that the Republic would have to pay in the event of the construction of an equivalent privately owned building are expected to be in the order of €7.79 million over the next five years.
In conclusion, it is noted that the Purchase Agreement has undergone a legal and technical review and all safeguards have been put in place for the purposes of safeguarding the interests of the Republic and the legality of the transaction in question, while it is stressed that the Purchase Agreement has not been signed, pending the release of the funds."
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