News Local State spends €180.6 million in 7 years on rent

State spends €180.6 million in 7 years on rent

The state has been paying large amounts for renting premises where ministries, governmental departments and services are housed. According to data submitted to the House by Minister of Transport Vassiliki Anastasiadou after a question by MP Giorgos Perdikis, during the past seven years a sum of €180.6 million was spent on the rent of approximately 500 buildings throughout Cyprus.

The amounts spent by year are as follows:
● 2011: €30.9 million
● 2012: €30.2 million
● 2013: €27.4 million
● 2014: €23.2 million
● 2015: €22.7 million
● 2016: €22.8 million
● 2017: €23.4 million

The issue was discussed in a recent meeting of the Council of Ministers which decided that a survey needs to be conducted so that alternative options for housing can be found. What is currently preferred is the construction of privately-owned buildings, either with full state funding or in collaboration with the private sector.
The Ministerial Council has instructed the General Managers of the Ministries of Finance and Transport, Christos Patsalides and Alekos Michaelides respectively, to determine the terms of reference for the consultants. The consultants will be selected following a public tender, which is expected to be announced in September. The cost of consulting services was estimated at € 100,000.

It is currently urgent to relocate the Ministries of Interior, Energy and Transport for the following reasons:

● They are housed in older buildings which do not meet minimum modern requirements especially in the area of telecommunications.

● Because of their age, buildings consume a lot of energy, which results in large amounts being spent on bills. In addition, they are not environmentally friendly. Indicatively, the aforementioned three ministries spend about € 1.2 million each year for lighting, heating and fuel.

● Several departments of these Ministries are scattered geographically across Nicosia, which is counterproductive and increases their operating costs.

The amounts paid for rent by these three ministries are particularly large. In 2017 €3,583,109 was paid overall.
The state owns real estate in Nicosia which could potentially be used for the construction of new buildings for these three ministries. In particular, there is a land plot of 26,255 sq.m. opposite the Hilton Hotel, a land plot of 202,586 sq. m. close in the State Fair area and a land plot of 51,472 sq.m. in the RIK (CYBC) area.

The Minister of Transport, Vassiliki Anastasiadou, in her response to the House, dated 16/8/2018, informed MPs about the new policies implemented by the Council of Ministers from the start of the year in regard to the state’s housing needs. In particular, on 1/1/2018, the Central Housing Agency of the State Services was abolished and the responsibility for examining requests for the housing of public services was assigned to the Ministries of Transport and Finance.
The following procedure is as follows: The state services submit their requests for housing / relocation to the Department of Public Works of the Ministry of Transport, accompanied by the technical characteristics that the building needs to have. Subsequently, the Department of Public Works examines the request and indicates the availability of existing state property based on the real estate Property Register. In case of lack of availability of existing state property, the Department of Public Works authorises the state agency concerned to proceed with the opening of a public tender for the construction of new buildings.The Department of Public Works will undertake the evaluation of the technical characteristics of the above selection and the Ministry of Finance the evaluation of the terms of the rent contract. Once the relevant approvals have been given, the state agency concerned will award the tender.

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