Energy minister pinned down on GSI specifics

The chairman of the parliamentary energy committee has fired a volley of tough questions at the energy minister over the Great Sea Interconnector (GSI) in his persistent effort to pin down the project particulars, it emerged on Wednesday.

The ball is now in Energy Minister George Papanastasiou’s court, with the minister having told Philenews that the questions are to be answered in future meetings through the “proper procedures.”

Committee Chair and Disy MP Kyriacos Hadjiyiannis in recent weeks has doggedly pursued answers about the project’s feasibility and has gone so far as to suggest that processes relating to the endeavour warranted investigation by the European Public Prosecutor’s Office (EPPO).

In a written statement presented to the minister on Tuesday, the MP said critical questions arise over the Cyprus-Crete subsea cable and the cost-benefit analysis submitted by the project’s driver, Greece’s independent power transmission operator (Admie).

Among the questions, Hadjiyiannis asked how it was possible for Exergia (the company which carried out the analysis on behalf of Admie) to have concluded that the project was beneficial when the same company had a year ago said the project was unviable, after an analysis carried out on behalf of the European Investment Bank (EIB), suggesting that the better option for Cyprus is to improve its energy storage capacity rather than build the electrical interconnector.

The MP went further, asking how it came to be, that such an important tender had received a just a single response from one company (DNV), who happened to be the assessor the ministry chose last February to recommend participation by the state as a shareholder.

“Should the tender for such a massive project, to be built to the tune of over €2 million, with a 40-year-lifespan, and of crucial import to the island’s energy future, not be subject to competition and specifications, so as to secure interest from top European and global companies, rather than just the DMV’s Dubai branch?” Hadjiyiannis asked.

The minister of energy had announced he would seek a contractor evaluation by August 12 but how would he evaluate the cost-and-benefit without elucidation of the final cost of the project with detailed documentation, the MP continued.

In the absence of binding delivery times from the manufacturers; a date of commercial operation from ADMIE; and an evaluation of system-readiness to utilise the electricity that will end up at a single point in Cyprus (Kofinou), this was impossible to calculate, Hadjiyiannis charged.

At the moment three final cost and delivery factors are still obscure, the MP reiterated, without which the project cannot be judged.

The three factors are the manufacture of the cables for which Nexans, the cable company, must complete detailed subsea surveys and provide and sign a contract with specified cost and delivery dates.

Likewise pending, are the time and cost requirements for the transformer stations, for which Siemens must submit its final design study and sign off on a binding agreement.

And lastly, the final cost and completion time of the project by Admie must be pinned down.

After the above points are clarified, Admie should commit to the final cost and delivery date of the project.

“As it stands, Admie undertakes no risk while ensuring a very high return on investment. However, this does not mean that the interests of the Republic of Cyprus are served at the same time,” Hadjiyiannis’ letter concluded.

The GSI (formerly the EuroAsia Interconnector) was handed over to Greece’s Admie in October 2023.

Admie is 51 per cent owned by the Greek state. The State Grid Corporation of China has a 24 per cent stake, with the rest owned by other investors.

In January 2022, the European Commission approved €657 million under the Connecting Europe Facility (CEF) for the cable project. There was also an additional grant of €100 million through the Cyprus Recovery and Resilience Plan, part of the EU Recovery and Resilience Facility.

Meanwhile, the employers and industrialists federation (Oev) on Monday threw its weight behind the proposed subsea cable, calling the project “an opportunity not to be missed.”

In a public memo sent to the president, Oev said the GSI will prove of benefit and that Cyprus is the only European island-state without an electricity link.