THE Cyprus government has repeatedly said it was not going to default, but there are growing signs it is only paying salaries and leaving other debts unpaid.
Companies that have completed government jobs are still waiting for payment; others are still awaiting VAT refunds.
One big construction firm which built a road in Nicosia is still waiting for more than a million euros, despite completing the project 18 months ago.
The government found a pretext relating to the technical specifications to avoid payment and even after a compromise deal was reached, the state has still refused to pay.
But it seems to make no difference if a finished project complies with all requirements.
Work on the Paphos sewage project was completed and the government took delivery but it is still refusing to pay the contractor the final 5 per cent, it owes.
The authorities have told the company that it has no money and will settle the debt, with interest, when funds are available.
“The interest we will receive at some time in the future is no consolation,” said the company’s executive. “Our problem is cash flow. We need the money now to pay wages and our suppliers. Non-payment causes us huge problems.”
A smaller contractor that has been working on a government project in Dhali is now looking to secure a bank loan in order to complete it because he has run out of money and has received no payment from the government.
As a result he has been unable to pay his sub-contractors who had done part of the electrical engineering work.
The sub-contractor, who is owed €15,000 by the government, is now unwilling to run the risk of buying the electrical units he was contracted to install because he does not know when he will be paid for them.
“If tomorrow I am obliged to make redundant my three employees, because I have no money to pay their wages, whose fault will it be,” he asked.
Companies are also complaining about significant delays in getting VAT refunds.
The VAT service did not immediately respond to a call seeking comment.
In mid-October, court bailiffs seized seven vehicles belonging to the government at the behest of people owed money by the state for land appropriations it has yet to pay.
The application for the writs was filed by owners of land earmarked for the construction of the Paphos to Polis highway that has been put on hold by the cash-strapped state.
Bailiffs seized three vehicles belonging to the district’s public works department, one each from the forestry department and the land registry and two belonging to the electromechanical services.