The termination the Paphos-Polis road contract has pushed estimated costs to €320 million, or about €10 million per kilometre, Transport Minister Alexis Vafeades told parliament on Thursday.
Phase one of the project is now expected to cost €90 million, up from the original €72.9 million contract. With €14.4 million already paid to the contractor, total expenditure could reach €104.4 million before considering potential compensation claims.
The contractor is seeking €35 million in compensation, while the government plans to file counterclaims. The state has failed to seize the contractor’s performance guarantee after courts ruled proper termination notice procedures were not followed.
Former Auditor General Odysseas Michaelides expressed concerns about the government’s handling of the contract termination, suggesting it may have left taxpayers exposed to additional costs despite seemingly unreasonable contractor claims.
Minister Vafeades announced plans to upgrade the design to a four-lane highway, with new contractors expected to be appointed by September. The project will proceed in phases, with the Polis Chrysochous-Stroumbi section tender planned for February 2026.
“While any project termination represents a setback, sometimes it’s necessary to move forward rather than remain stagnant”, Vafeades said, defending the decision to end the contract.
The 31-kilometre road will connect Pafos to Polis Chrysochous, with additional access points planned for Mesogi and Marathounta communities to promote regional development.
Parliamentary Control Committee Chairman Zacharias Koulias confirmed that €16 million has been spent on construction to date, with 10% retained as security.
Legal proceedings regarding compensation claims and the performance guarantee are expected to continue through the courts.
