Warning sent over Ercan deal payment

FINANCE Minister Serdar Denktaş has threatened to “appoint an administrator” if the consortium behind the 300-million-euro expansion of Ercan airport does not make payments he claims are owed to the government.

The Democrat Party (DP) leader told Parliament on Tuesday he had sent a “final warning” to the T&T consortium — made up of Taşyapı and Terminal-Yapı — which has a 25-year deal to redevelop and run the airport.

Work on a new 150,000m2 terminal building that will be able to handle 10 million passengers a year is continuing, while a second runway has been constructed. The new runway will be able to cater for wide-wing 300-plus-capacity aircraft.

A tunnel on the eastern side of the airport and a new road to the village of Akıncılar, bypassing a military base and thereby removing the need for people travelling there to show ID cards, were completed last year. Mr Denktaş said the previous National Unity Party(UBP)-DP coalition, of which he was a member, had been “too forgiving” to T&T, which was “not meeting its obligations under the contract towards the state”.

He said the consortium was “not paying the correct amount of KDV [VAT]” and other fees to the government and that its directors were trying to “offset” the payments against money they claimed was owed to them “despite knowing that this demand is against the law”.

“We will not be entertaining this demand,” Mr Denktaş said. “We sent them our final warning letter [on Monday].”

Mr Denktaş, who served as deputy prime minister and finance minister under the previous government, said he had “opposed the [Ercan] tender” from the start but was “powerless” to stop it going ahead because “certain departments . . . the Treasury and Accountancy Department and the Money and Exchange Department . . . were not connected to me, and I was unable to intervene in issues I saw as wrong”.

He said that according to Finance Ministry information, T&T had paid “less than it should have done” to the state to date.

Mr Denktaş said he would not hesitate “to appoint an administrator” if the companies “failed to make the due payments without giving any explanations”.

“Their time is very limited. We have warned them,” he added.

Under the terms of the agreement, T&T has to give the government 47.8 per cent of any turnover from Ercan airport and pay KDV at a rate of 16 per cent.

T&T chiefs have claimed they are owed money by the government, and called for a meeting with officials to “sit down and calculate who owes what to whom and then make deductions accordingly”.

T&T did not respond to requests from Cyprus Today to make further comment.