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1. The building and its use.
In the popular uprising of 1931 the wooden Government House was destroyed by fire and it was decided to build a new Government House based on traditional architectural elements of the place.
The design of the new Government House was made by a British firm and its construction was undertaken by the Government Department of Public Works of Cyprus. This was preceded by visits to various traditional buildings in Cyprus, where notable local traditional architectural elements were noted and copied.
Byzantine and Gothic elements, as well as a few Turkish elements, make up the architecture of the building. The row of columns on the ground floor and the upper floor are based on a similar construction in the monastery of Achiropoitos near Lapithos. The carved capitals and bases of the columns were chosen from designs from Kythrea, Lampousa and Nicosia. The proportions of the tower in the centre of the building are taken from the Kolossi Castle. In the original plan the roof of the castle was intended to be made with pyramid-shaped tiles, but for certain practical reasons and to provide an additional Byzantine element to the building, it was replaced with a dome.
For the general construction of the building, a special stone (puropetra) from Gerolakkos was used for its pale greyish-yellow colour, hardness and durability. In the interiors (fireplaces, stairs, etc.) limestone from the Limassol region was used.
Considerable care was also taken in the building of the Governor's House as regards timber. Wood from the Cypriot forests was used (eucalyptus, pine, plane tree, cypress, walnut, sycamore) and from various parts of the British Empire, for example from Burma and Canada. The door of the main entrance to the Governor's House was modelled on the door of St. Chrysostom's Monastery, located in the Pentadaktylus mountain range. Each leaf was formed from at least 288 small pieces of wood from six different trees, joined together without the use of nails or screws. This avoided possible distortion. The carved beams and reeded roof mats were clearly of Cypriot origin. The ceiling joist supports in the main rooms had been removed from an old house that had been demolished. Some of the decorative elements within the building, notably the staircase on the upper floor, were copies of ancient objects, while the curtains were hand-embroidered with Cypriot decorative elements.
After the independence of Cyprus and the departure of the British Governor in 1960, the Government House was established as the official Presidential Palace of the Republic of Cyprus.
The Presidential Palace was destroyed on 15 July 1974, during the coup against President Makarios. Everything was burnt down, except the standing walls, which were also damaged by the fire.
It was rebuilt a few years later with financial sponsorship from Greece and has been used again since 1979 as the office of the President of the Republic of Cyprus. During the presidency of Mak. During the presidency of Spyros Kyprianou and Mr George Vassiliou, the Presidential Palace was occasionally used as the residence of the President of the Republic and his wife.
On 28 May 2010, it was announced that various works were to be carried out on the building, with the aim of reducing the carbon emissions emitted by the building. The cost of the work was €1.2 million. Among other things, solar panels were added to the car park, a new ventilation system and new windows were installed. In addition, €2.7 million was spent on the construction of a new hall for the Cyprus Presidency of the European Union in the second half of 2012. The new hall was opened on 17 May 2012.
2. Maintenance/improvement/expansion works in the last ten years
According to information received from the General Accounting Office's Integrated Management and Financial Information System (FIMAS), in the period 1.3.2013 until 28.2.2023 the following amounts were spent in total from the three relevant funds of the Presidency of the Republic:
| No. Account number |
Description
[/TD] [TD]
Amount spent
[/TD] [TD]Total amount obligations (from Orders)
€
[/TD][TR] [TD]
0301200302
[/TD] [TD]Maintenance of Office Buildings
[/TD] [TD]899.425
[/TD] [/TD] [TD]----
[/TD] [/TR] [TR] [TD]0301200303
[/TD] [TD]Residential Maintenance
[/TD] [TD]39.654
[/TD] [/TD] [TD]----
[/TD] [/TR] [TR] [TD]0301200319
[/TD] [TD]Minor Projects
[/TD] [TD]2,668,878
[/TD] [TD]1.170 (for the period 1/1/2023-28/2/2023)
[/TD] [/TR] [/TR]
For the period 1/3/2023-13/7/2023 (Obligations from orders):
| [TD] No. Account No. |
Description |
[TD]
Total
Amount of liabilities
[/TD] [TD]Total
Amount of liabilities
€
[/TD] [/TD][TR] [TD]
0301200302
[/TD] [TD]Maintenance of Office Buildings
[/TD] [TD]81.500
[/TD] [/TR] [TR] [TD]0301200303
[/TD] [TD]Residential Maintenance
[/TD] [TD]----
[/TD] [/TR] [TR] [TD]0301200319
[/TD] [TD]Minor Works
[/TD] [TD]195.708
[/TD] [/TR]
Also, based on information provided to us by the Presidency of the Republic, during the last decade the most important maintenance/improvements/extensions carried out at the Presidential Palace were the following.
2017:Renovation of the kitchen of the presidential residence, Cost €18,300 plus VAT.
2017:Renovation of the kitchen of the presidential residence, Cost €18,300 plus VAT.
For the sake of completeness, it is reported that, based on data provided by the Presidency of the Republic, over the last decade, the most significant maintenance/improvements/extensions made to the Presidential Residence in Troodos were at a total cost of €299,431, of which €18,234 were from Presidency budget funds and €281,197 from Public Works Department budget funds.
The amounts mentioned above as having been given to us by the Presidency of the Republic have not been checked by our Office.
With regard to the way in which the relevant works were included in the State Budget, the Explanatory Memorandum of the Budget for the last three years shows that the following works were included in the Presidential Palace:
Budget 2021
Subgroup of Expenditure 03301 - Maintenance of Buildings and Offices
Under this subgroup are included, inter alia, appropriations of €1.800.000 intended to cover various maintenance/improvements/extensions of the Presidential Palace and its surroundings:
1. Construction of the Presidential Guard Headquarters
2. Construction of a new building - Presidency Administration Offices (Phase A & B)
3. Renovation/remodelling of government building on Vyronos Avenue to meet the housing needs of the Presidency.
4.
Budget 2022
Expenditure subgroup 03301 - Maintenance of Buildings and Offices
Under this subgroup are included, inter alia, proposed appropriations of €450.000 intended to cover various maintenance/improvements/extensions of the Presidential Palace and the surrounding area, as follows:
1. Renovation/remodelling of the Government building on Byron Avenue to meet the housing needs of the Presidency.
2. Various other minor projects.
Budget 2023
Expenditure subgroup 03301 - Maintenance of Buildings and Offices
Under this subgroup are included, inter alia, proposed appropriations of €180,000 intended to cover various maintenance/improvements/extensions of the Presidential Palace and its surroundings, as well as various other minor projects.
3. Energy Upgrade of the Presidential Palace
3.1 The tender No. DΘΓ13/2022 entitled "Energy Upgrade of the Presidential Palace of the Republic of Cyprus" was launched by the Department of Public Works (Contracting Authority) on 21.On 3.1.2023 only one tender was submitted for an amount equal to €1,409,658 (plus VAT), i.e. 22.58% higher than the established estimated value. Our Office recommended cancelling the tender since the price was unrealistic and no competition had developed either but, nevertheless, the Tender Board decided on 23.2.2023 to award the tender. The contract was signed on 29.3.2023. 12.1.2023, which concerned a decision of the Contracting Authority to cancel a tender of the Ministry of Defence in which the lowest bid was 19.2% higher than the estimated value, the AAP while upholding the decision of the Contracting Authority had pointed out that "awarding at unrealistic prices would constitute an abuse of power".
3.2 Based on the Contract documents, the project mainly includes the following:
- Replacement of existing frames with high energy efficiency frames. This work includes the maintenance, completion of the existing frame and/or replacement of part of the existing frame if necessary. Where wooden shutters/perforations and other wooden elements in the frames remain.
- Installation of photovoltaic system.
- Replacement of heating and cooling systems while retaining existing piping.
- Replacement of ventilation systems.
- Installation of electric vehicle charging stations.
- Installation of an automation system with equipment for recording and monitoring the building's energy systems.
- Repointing of internal walls and suspended ceilings, where and when they are affected by the planned building and electromechanical energy upgrading works of the building.
3.3 The project is co-financed by the European Regional Development Fund of the European Union at 85% and 15% from national resources.
4. The provision of free housing and holiday homes for the President of the Republic
4.1 We note first of all that there is no reference in any law or regulation that would imply, directly or indirectly, an obligation of the Republic to provide housing and/or holiday homes for the President of the Republic and/or his family. What seems reasonably to be said is that the President of the Republic has a customary right to use, without payment of rent, the residences in the Presidential Palace and Troodos as long as they are available
But that cannot mean that the Republic must undertake maintenance, renovation or improvement of those residences as having a duty to the President of the Republic. Such maintenance, renovation or improvement work may be undertaken by the Republic only at its option when it considers such work to be necessary for the preservation of its property.
In any event, if such work is to be extensive, it is expected that it will be explicitly included in the State Budget with a reference to it in the Explanatory Memorandum. For example, as mentioned above, in previous years, the renovation/remodeling of government building space on Byron Avenue to meet the housing needs of the Presidency was included in the Explanatory Memorandum in an explicit manner. Similarly, a reference to the renovation of the residence at the Presidential Palace should have been included since, as indicated below, this is work in the order of €150,000.
4.2 Indirectly related to this issue is the expenditure relating to the guarding of the President of the Republic, since the decision of the President of the Republic to move his family to the presidential residence in the Presidential Palace and to leave his private residence means that the areas guarded by the Police on a 24-hour basis are reduced. This by definition should mean a significant reduction in the personnel of the Presidential Guard. The Presidency of the Republic has informed us that the Risk Assessment Committee will carry out a Risk Assessment Study on the security issues of the Presidential Palace and depending on the recommendations and findings, the Audit Office will be informed whether there will be a reduction in the Presidential Guard. Our Office notes that any non-significant reduction in the number of personnel of the Presidential Guard (which should have been done from the very first moment of the move more than a month ago), with the justification that, now that the need to guard the private presidential residence has been abolished, the need to increase the number of personnel guarding the Presidential Palace has suddenly become apparent, will significantly strengthen the evidence (to the extent that evidence can reasonably be cited) that the number of police guards is not derived solely from a technocratic assessment It is therefore our recommendation that the Presidential Guard be reduced without further delay to the extent necessary to achieve the corresponding (significant) savings of state resources.
5. Maintenance and renovation works in the Presidential Residence on the 1st floor of the Presidential Palace.
5.1 Works performed under contract no. DΘΓ13/2022 - Energy Upgrade of the Presidential Palace of the Republic of Cyprus
Under this contract, 2 change reports were submitted for a total amount of €85,954.89 including VAT [(€6,231.00 + €66,000.00) PLUS VAT]. The works carried out in the context of these changes concerned the Presidential Residence and other areas of the Presidential Palace. For the Presidential Residence the cost of these two changes was in the order of €39,000 plus VAT and concerned the installation of new wallpaper and new suspended ceilings with lighting points in some areas, renovation of the visitors' washroom, etc.
The changes included in the two reports were approved, the first one by the Project Coordinator and the second one by the Departmental Committee on Changes and Claims (CSCR), based on the provisions of article 72(1)(e) of the Law on the Regulation of Public Procurement Procedures and Related Matters (Law 73(I)/2016), which concerns amendments to works provided for in the contract. If, for example, the contracting authority decides that there is a need for a modification to the photovoltaic system already provided for in the contract, then such modification falls within the provisions of Article 72(1)(e) and is approved, subject to the conditions set out in that Article, by the Coordinator, or the TEAA, or the Central Committee for Changes and Claims (CCC), depending on the amount of the change, as set out in relevant Regulations (CPR138/2016).
However, in this case, it was not a matter of modifications to originally planned works, but of additional works not foreseen in the contract. In this case, the appropriate legal basis for considering the possibility of awarding the additional works to the same contractor is Article 72(1)(b) which deals with the following cases:[/I]
(i) It cannot be done for economic or technical reasons, in particular, for requirements of interchangeability or interoperability with existing equipment, services or facilities acquired under the original contract, and
(ii) would entail significant disruption or substantial duplication of costs for the contracting authority."
Whereas, as noted above, modifications under section 72(1)(e) are approved by the Coordinator, or the CRA, or the CRA, depending on the amount of the change, the award of additional work under section 72(1)(b) is made only by the CRA. Therefore, the Coordinator and the CRA did not have the power to approve the two change reports, but they should have been sent to the CRA. This was even pointed out to the CECA by the representative of the Control Directorate of the Ministry of Transport, Communications and Works (MCCW) who participated as an observer, but this was ignored.
But even if the TEAA believed that the change could be approved on the basis of Article 72(1)(e), it still would not have had competence since the value of the change in the second report was €66,000 and therefore exceeded the TEAA's power limit (€60,000).
On the basis of the foregoing, the approvals of the changes to the two report cards by the Co-ordinator and the CRA of the TDF were not lawful and were given in excess of authority, since the competent body to approve them would be the CRA and not the Department itself.
The subsequent, and after our Department raised the issue, sending by the TDF of the already approved report to the CERC and its formal approval by the CERC on 26.7.2023, was also not lawful, since it was also given in excess of authority, this time by the CERC, since according to the relevant Regulations (KΔP138/2016) it is not allowed to approve a change that has been even partially implemented. This is the reason why the reason given, that part of the works (remaining those outside the Presidential Residence, on the ground floor of the Presidential Palace) had not yet been carried out by the Contractor, does not change the fact that the instructions had already been given and the works partially (even half) had already been carried out.
5.2 Works performed by the Department of Public Works and the Department of Electromechanical Services (DPE) through shortcut purchases and self-performance crews.
In addition to the above additional works, which were executed as amendments in the framework of contract no. DΘΓ13/2022 - Energy Upgrading of the Presidential Palace of the Republic of Cyprus, in the Presidential Residence on the 1st floor of the Presidential Palace, works were executed by the Public Works Department and THMY through purchases by summary procedures or through existing tenders "running contracts", and with self-contracting crews. The works carried out by TDE concerned building and carpentry works in bedrooms and sanitary areas at a total cost of €66,000 including VAT and the works carried out by THMI concerned the supply of sanitary equipment, upgrade of electrical and telecommunication installations, etc, with a total cost of €32,000 including VAT.
5.3 Taking into account that in addition to the works carried out in the Presidential Residence on the first floor, some works were also carried out in other areas, the total cost of the works carried out in the Presidential Palace (not including the works provided for in contract no. The following table shows the results of the contract (see contract no. DΘΓ13/2022 - Energy Upgrade).
|
Method of execution |
[TD]
Place
[/TD] [TD]Total cost
[/TD][TR] [TD]
Presidential Residence
[/TD] [/TD] [TD] [TD]Presidential Residence
[/TD] [TD] [TD] [TD]Presidential Residence[/TD] [/TD] [TD]
Other premises at the Presidential Residence
[/TD] [/TR] [TR] [TD]€
[/TD] [TD]€
[/TD] [TD]€
[/TD] [/TR] [TR] [TD]As an amendment to contract no. DΘΓ13/2022 - Energy Upgrade
[/TD] [/TD] [TD]46.566
[/TD] [TD]40.579
[/TD] [TD]87.145
[/TD] [/TR] [TR] [TD]From TDE
[/TD] [TD]66.000
[/TD] [TD]0
[/TD] [TD]66.000
[/TD] [/TR] [TR] [TD]From THMI
[/TD] [TD]32.359
[/TD] [TD]6,185
[/TD] [TD]38,544
[/TD] [/TR] [TR] [TD]
Total
[/TD] [TD]144.925
[/TD] [TD]
46.764
[/TD] [TD]191.689
[/TD] [/TR]
Note: All amounts include VAT
5.4. Pursuant to Article 90(2) of the Law on the Regulation of Public Procurement Procedures and Related Matters (L.73(I)/2016), "contracting authorities are not allowed to segment contracts in order to favourably apply the provisions of this Article", i.e. segmentation in order to use summary procedures is not allowed.
On the basis of this, we consider that the Departments of the Ministry of Public Procurement (TDA and THMY), which were responsible for the execution of the works, did not, as they should have done, faithfully follow the public procurement legislation. Instead, they reduced the works to use either summary procedures, or 'running contracts' type agreements, or changes to the existing energy upgrade contract which were not legally and timely approved by the competent body.
Furthermore, the awarding of additional works, as the additional works of the mentioned report under Article 72(1)(b), can only be done by the CRA which is the only competent body for such cases, provided that its reports are submitted in time, since the CRA is not entitled to approve ex-post works without fulfilling the specific requirements of Regulation 19.3 of the CPR.138/2016. Our report does not imply that, had the reports been submitted to the CRA in a timely manner, they could have been legally approved.
We note, however, that, with respect to the necessity of the works under reference other than the original contract, our Office has not identified any works that it believes should not have been carried out.
What we do highlight is that:
[A]the total work of maintenance and renovation of the presidential residence on the 1st floor of the Presidential Palace, amounting to €150.000, should have been explicitly included in the Explanatory Memorandum of the State Budget, or in a Supplementary Budget, in order to be approved by the House of Representatives,
this work should have been tendered from the TOR and awarded to a contractor selected through open procedures in accordance with public procurement legislation, and
[C]the very limited works, that would necessarily have been awarded to the contractor of the Energy Upgrade contract should have been brought forward by the TOR prior to the issuance of the execution instructions for approval by the CECA (this applies only to those works whose award to a different contractor would involve significant disruption or substantial duplication of costs for the contracting authority).
(AF/SX)
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