The Auditor General has criticised the Deputy Minister of Research, Innovation and Digital Policy over a “peculiar relationship” with the company awarded a €3.85 million contract to produce 100,000 electronic identity cards without an open tender process.
Auditor General Andreas Papaconstantinou highlighted in a special report that the deputy minister previously served as executive director of the private company that received the direct assignment for printing the digital IDs.
The deputy minister defended the project, stating that “the development of the work was the result of institutional and technical procedures that began in 2017 and were completed in 2025 under the supervision of three different government formations”.
€3.85 million contract awarded without open tender process
The Tenders Board approved the direct assignment to the private company in October 2024 with an estimated cost of €3.85 million, without preceding open tender procedures.
The Deputy Ministry justified the decision by arguing that no other economic operators possessed the required certification from the Department of Electronic Communications.
However, Papaconstantinou noted several concerns in his report.
“It is not clear that other economic operators from the EU could not have participated in an open tender, especially if sufficient time had been given, considering that the relevant legislation was passed in 2021,” the report stated.
Deputy minister previously served as company’s executive director
The auditor general emphasised that “given the peculiar relationship of the Deputy Minister with the contracting company, in our opinion, the Deputy Ministry should have shown greater care in the assignment process”.
The report noted that the ministry could have followed a “Voluntary Announcement” procedure, which would have allowed 10 days for third parties to submit any objections, even when avoiding open tender procedures.
Implementation of the project began on 20 January 2025, but fewer than 10,000 electronic identity cards have been issued to date, despite the first 30,000 applications being free of charge.
The auditor general suggested that “further information measures or other incentives will be needed to achieve a substantial increase in interest”.
The report revealed that during direct negotiations, the company submitted an offer matching the estimated expense amount of €3.9 million. Negotiations resulted in a reduction of €0.50 per electronic identity card, totalling €50,000 savings, bringing the final contract value to €3.85 million.
The auditor general acknowledged that no other licensed economic operator appeared to exist in Cyprus at the time to participate in an open competition and recognised that executing the project requires specific infrastructure with high initial costs.
However, the report emphasised that given the contract covered only the first 100,000 electronic identity cards, with future related tenders expected, the ministry has expressed its intention to proceed with procedures allowing participation from other economic operators for future needs.
The decision to resort to the negotiated procedure was taken by the Council of Ministers based on the Deputy Ministry’s proposal, though the auditor general noted this authority belongs to the Tenders Board rather than the ministerial council.
