Construction company seeks €35m over scrapped Paphos-Polis road contract

Construction company Aktor (formerly Intrakat) is now seeking over €35 million in damages through the courts after the public works department terminated the contract with regarding the Paphos-Polis road project, according to its CEO Alexandros Exarchou, who spoke at an online press conference.

“We are compelled to pursue our legal rights in Cyprus and, if necessary, in Europe,” Exarchou said.

The public works department announced on Monday that the study and construction of the first phase of the Paphos-Polis highway has been terminated.

The department attributed the termination to “significant and unjustified delays on the part of the contractor”.

Despite repeated reminders and warnings during regular meetings and through official letters, the construction company reportedly failed to address the delays, the department said. It added that even tasks initiated in the past eight months had not progressed as expected, despite conditions that allowed for uninterrupted work.

Explaining the project’s impasse, Exarchou cited significant issues with the large volume of excavation materials, unsuitability of excavated materials, and the lack of adequate disposal sites.

He also highlighted delays in land expropriations and the public works department’s response times, all of which, he said, have prevented the Paphos-Polis road project from progressing.

Exarchou detailed his meetings with Transport Minister Alexis Vafeades on four occasions (March 13, May 14, July 31, and September 18, 2024), where he raised concerns over the excavation volume, the criteria for suitable materials, and quarrying issues. He said he proposed solutions to make the project viable and refrained from terminating the contract as early as April 2023.

“The Cypriot government unilaterally terminated the contract without waiting for our response to a request for a final meeting. This was unjust and displayed what we consider an extremely hostile attitude,” he said.

Discussing material suitability, Exarchou added that excavation work had reached 1.3 million cubic metres by September, out of an approved total of 3.8 million.

However, only 16 per cent of these materials were deemed suitable, he said, adding that the project would require an impractical amount of 15 million cubic metres to complete.

He described the material specifications as technically flawed, explaining that an experienced engineer would recognise an error in requiring materials to meet two cumulative standards rather than just one.

Exarchou argued that, under such conditions, the project cannot continue legally due to environmental restrictions. He also disputed reports that the company had requested a five-year extension, clarifying it only sought a three-year extension.

According to Exarchou, the public works department cited four reasons for terminating the contract, namely the failure to submit required studies, the lack of timelines, the withdrawal from the contract, and the alleged deficiencies in the company’s technical capacity. He rejected these claims, saying that equipment and staff remained onsite, but excavation ceased as further digging would breach environmental permits.

“Aktor has submitted studies and timelines,” he said, adding that independent evaluations will be sought to confirm the competency of the company’s experts.

Exarchou further remarked that this is the first time in which his company’s ability to complete a project has been questioned, referencing multiple successful projects completed by the company.

Responding to claims that the government had completed expropriations and identified suitable disposal sites, Exarchou concluded by saying that “the government is lying”.

Earlier on Tuesday, Vafeades promised that the Paphos-Polis road will be ready within the next three years, as local residents questioned the viability of the project after the contract for the first phase of its construction was torn up by the government a day earlier.

Speaking at a town hall meeting in Polis Chrysochous, he said the government would now calculate the value of the work which has been carried out on the project so far before preparing the documents for a new tender.

The tender will then be outsourced to a new contractor, which, it is hoped, will finish the job.