Summary Report

CYPRUS

Overview

Cyprus does not have a specific PPP Law. The award procedures for PPP contracts are governed by general public procurement laws. There is no specific procedure for the award of PPPs; there is only a reference to the public procurement law – with all the advantages (the usual procedure is well known to national players and review bodies) and disadvantages (adaptation to the needs of such projects is more difficult) that such a reference brings.

Cyprus has implemented and follows at least all the minimum requirements of the EU Public Procurement Law. Cyprus’s general public procurement laws are fully harmonized with EU public procurement legislation, including Directives 24/2014 and 25/2014.

As for concession PPPs, Cyprus enacted a new Concessions Law earlier in 2017 which is fully harmonized with EU Directive 23/2014/EU.

Based on the new legal framework recently implemented in Cyprus, an investment plan and a requirement for a feasibility study is in place. Further, Cyprus is a signatory to a large number of bilateral investment treaties and double tax avoidance treaties which facilitate a favourable investment environment for foreign investors who wish to participate in public procurement procedures in Cyprus.

There is also a fast-track procedure of recourse to the Tenders Review Authority that may be used by failed tenderers in order to challenge the validity of the conclusion of the contract with the successful tenderer. This may then be followed by the longer procedure of recourse to the Administrative Court, and then the Supreme Court on appeal.

On the other hand, for both non-concession and concession PPPs, there are no statutory rules limiting the content of PPP agreements, which may in theory result in difficult contract negotiations for foreign investors. In particular, the public procurement legislation remains silent on such matters as securities. One reason may be that EU concession law does not require this. So, like many other EU member states Cyprus missed the opportunity to add useful provisions on top of the minimum required to comply with EU Law.

Areas where improvement relating to non-concession PPPs is still possible, are:

• exit for equity investors;

• project development and evaluation;

• a lack of rules for post-award negotiations;

• a lack of rules for termination grounds and termination compensation, which leaves it exclusively for the project agreement to find balanced rules for these matters;

• unclear/missing rules for interrelations with regulatory matters; and

• no rules on securities and government support.

For concession PPPs, the following points require improvement:

• exit for equity investors;

• project development and evaluation;

• a lack of rules for post-award negotiations;

• a lack of rules for termination grounds and termination compensation;

• unclear/missing rules for interrelations with regulatory matters; and

• no rules on securities and government support.