The Auditor General identifies irregularities in the relocation of the Land Registry

Snapshot 2018 09 11 09.52.27 Auditor General, Famagusta Land Registry, Nea Famagusta

According to today's publication of the newspaper "Phileleftheros", the Auditor General made the agreement for the rent of the Famagusta Provincial Land Registry in Paralimni "leaf and feather", indicating that "the whole process and the result raised serious questions regarding the safeguarding of public since: It was not a product of fair competition, unprofitable agreements were made regarding the execution of the landscaping works of the building, while at the same time there were delays and exceeding the initial amount calculated for their execution, as a result of which the building could not be received and used in predetermined time.

The audit of the Auditor General, which was carried out at the request of the Parliamentary Committee on Audit of Public Expenditure, records the following:

  • On 14.5.2018, with a letter from the Auditor General to the Director General of the Ministry of Transport (YMEE) and the prefect of Famagusta, he referred to the procedure followed and observed the following:
    • This building, based on the provisions of article 3 of the rental contracts signed on 15.6.2016, should have been delivered to the users for the relocation of their Departments, no later than 15.10.2016.
    • Finally, it was delivered only recently with the signing on 30.8.2018, of new rental contracts, after a delay of 22,5 months. The total time required to complete the process (from 5.6.2014 to 30.8.2018) amounts to 4 years and 3 months, a period which Odysseas Michailidis considers excessive for such procedures.

The Auditor General points out that with the selection of this building, the public interest has not been secured, since it was not a product of fair competition. The price of the monthly rent agreed with the owner (€ 7.83 / sq.m.) Is high, compared to the average price resulting from the published data of the Price Index of RICS Cyprus on 31.12.2015, for the area of ​​Paralimni (€ 3.34 / sq.m.).

It also finds unprofitable the agreements regarding the execution of the landscaping works of the building, by the state instead of the owner as it should be, for an amount of € 500.000, which with its proportional distribution in the 9 years of rent, raises the price of the monthly rent to € 9.84 / sq.m.

In addition to the above, the Auditor General notes that the decision taken to select this building has violated the principles of good administration, transparency and equal treatment, after substantial modifications of the published Call for Interest (PDO) were amended, such as the extension of the rental period of the building from 3 + 2 years, according to the terms of the PDE, to 9 years and the assumption by the state of obligations of the owner (landscaping works of the building).

He also notes that with this agreement the state will be required, after the expiration of the rental contract, to pay additional cost that will arise for the dismantling of the dividers on the ground floor of the building and its remodeling as a single office space.

Just recently the Certificate of Approval

The Certificate of Approval of the building was issued on 8.8.2018, the rental contracts were signed on 30.8.2018 and the relocation of the two Departments in the specific building took place on 5.9.2018. The Auditor General notes that the whole procedure followed for the rental of the building in question, is not in line with the procedures followed by the public for the rental of buildings to meet their housing needs.

The state ignored the instructions of the Audit 

Odysseas Michailidis observes that despite the instructions of the Audit Office, the State failed to seriously consider the possibility of immediate termination of the above rental contracts with the Owner of the building and a new call for interest, in order to ensure a reasonable rental price. to renegotiate their agreement with a view to signing new contracts that safeguard the public interest.

The Auditor General had requested in a letter the views / comments of the Ministry on these issues in order to inform the Parliamentary Committee for the Monitoring of Development Plans and the Control of Public Expenditure, for the following:

  • When was the Certificate of Approval expected to be issued and the building to be handed over to these Departments for relocation.
  • Whether the signing of new lease agreements with the Owner of the building had progressed.
  • Whether all the conditions of the Planning Permit were fulfilled, which is inextricably linked to the Provisional Planning Permit, by way of derogation from the provisions of the Paralimni Policy Statement.
  • Given that this Permit is of limited duration and is valid until 31/03/2023, date of termination of the lease of the plot with no. 116 years while the rental period of the building is 5 years) in case the Owner of the said plot refuses to renew the extension of the rental validity of the above plot no. 9.
  • The total amount of rent paid by the state for the housing of these Departments in the existing buildings in Larnaca from 15/10/2016, estimated date of delivery of the specific building until the transfer of the Land Registry and Urban Planning there.

The General Director of the ministry, Alekos Michailidis, replied that the total amount to be paid by the State for the housing of the above District Offices in Larnaca and Famagusta from 15/10/2016 to 15/6/2018 (ie period 20 months) amounts to € 833.116,67. The corresponding amount that would be paid by the State in case of relocation of the above Services on 15/10/2016, including the amount that would correspond to the configuration of the building would amount to € 452.592,59 (ie € 380.524,08 less would be paid ).

Source: Liberal