Govt to pay 800K euros over unpaid CTA debts

THE government is to pay 800,000 euros in compensation to a French aircraft engine manufacturer, bringing to an end a long-running legal dispute following the collapse of Cyprus Turkish Airlines (CTA) in 2010.

Reports of the payment, which was agreed before the New Year, were confirmed this week by Deputy Prime Minister and Finance Minister Serdar Denktaş.

He said that the money was to be handed over to Safran Aircraft Engines, formerly known as Snecma, as compensation for unpaid CTA debts.

The company previously provided maintenance and repair services for CTA’s fleet of Airbuses. It won a compensation case at a Paris court five years, which then led to wrangling between the two sides over the final bill.

The Cabinet decision to cough up the cash, taken on December 28, was made to prevent more interest being added to the amount, Mr Denktaş explained, blaming the “incompetence” of TRNC officials for failing to settle the case sooner.

“This is a very old case,” he told Cyprus Today on Wednesday. “Yet the compensation amount has failed to be paid up until now. The total . . . had gone up due to [interest]. So what has happened recently was that there had been a series of negotiations over the amount of the compensation. The government wanted to agree the payment before the New Year to avoid any further interest being reflected on it. We, the ministers, took a decision on December 28 . . . to allow the payment to be made from the 2017 government budget.”

Mr Denktaş said that the compensation was to be paid from a special fund “set aside for such issues”. Ministers also signed off a payment of around $132,000 to Turkish law firm Postacıoğlu, which has an office in Paris and which represented the TRNC during the case.

A spokesman for Postacıoğlu Law Office declined to comment on matter due to “confidentiality”.