A CONTENTIOUS bill stripping the Commerce Minister of the power to negotiate with companies interested in offshore gas prospecting has managed to survive the minefield of the legislative process and will be tabled for voting at the plenum tomorrow.
The bill has been drafted by DISY deputies Averof Neophytou, Lefteris Christoforou, Georgios Georgiou, European Party MP Demetris Syllouris and independent MP Zacharias Koulias. It’s geared at boosting the powers of the permanent secretary of the Commerce Ministry and of the head of the Energy Service Solon Kassinis.
The bill would give an advisory committee consisting of technocrats and permanent secretaries of ministries the power to negotiate the production-sharing contract with companies interested in prospecting in Cypriot waters in the second licensing round. Up until now, the power to negotiate belonged by law (the 2007 law on hydrocarbons) to the Commerce Minister and the Cabinet.
At the House Commerce Committee yesterday, a representative of the Attorney-general’s office was called in to vet the bill as well as two others - and found himself in the crossfire of MPs from opposing parties.
As it stands, the bill states that the criteria governing the awarding of hydrocarbons licences are determined by the Cabinet. The advisory committee of technocrats will assess the bids, but the final decision on whether to award a licence or not rests with the Cabinet – although that would be a mere formality.
Ruling AKEL has slammed the bill, saying it diminishes the authority the executive branch has over the assessment process. The legislative proposal has the backing of DISY, the European Party and apparently DIKO, and should garner enough votes.
But a second bill, drafted by DIKO deputy Angelos Votsis, did not pass muster with the Attorney-general. Under the bill, DEFA (Natural Gas Public Company) would become the exclusive importer as well as the exporter of natural gas on behalf of the state.
In short, it gives DEFA carte blanche to handle all facets of trade in natural gas. Moreover, the bill seeks to deprive the government of the exclusive right to replace/reappoint the members of DEFA’s board of directors until 2015. Under the proposal, the government would need parliament’s consent to do so. But this latter provision is unconstitutional as it violates the principle of the separation of powers, a representative of the Attorney-general’s office told MPs.
The bill is also problematic in that it directly contradicts the 2007 law on hydrocarbons which states that it is the Cabinet which decides on how natural gas is to be imported and sold.
And according to the Attorney-general’s office, expanding the remit of DEFA would mean hiring new staff. This in turn would entail extra government spending. But under the Constitution, the House may not legislate an increase in government expenditures.
Also in the pipeline is a bill by AKEL’s Nicos Katsourides. This aims to allow players other than DEFA to import natural gas, in order to liberalise the market. It would thus open a window for the Electricity Authority of Cyprus (and/or private IPPs) to import natural gas for a transitional period until such time as Cyprus becomes a gas exporter in its own right. It also provides for the regulation of DEFA by the Cyprus Energy Regulatory Authority (CERA).
The DIKO and AKEL bills will be finalised and submitted to the plenum, possibly next week.
At a charged session of the House Commerce Committee yesterday, Neophytou alleged that Katsourides’ bill had in reality been drafted by CERA to “bring the EAC back into play”.
All three bills were intended to be submitted to the plenum before the second offshore licensing round got underway, but none made it in time.
