**GSI Project Costs Could Exceed Initial Estimates, Finance Minister Warns**
The Great Sea Interconnector (GSI), a significant infrastructure project aimed at enhancing electricity connectivity, may incur costs significantly higher than the previously estimated €1.9 billion, according to Cyprus' Finance Minister Makis Keravnos. During a parliamentary session on Tuesday, Keravnos expressed concerns not only about the rising costs but also about the project's potential impact on electricity prices for consumers.
The €1.9 billion figure, often referenced in media reports, pertains solely to the capital expenditure (capex) associated with the subsea cable of the GSI. However, Keravnos pointed out that this estimate does not encompass additional expenses such as insurance, warehousing, and ongoing maintenance, which are crucial for a comprehensive financial assessment of the project.
Keravnos emphasized the need for updated financial data and a clearer understanding of the GSI's viability before the government can commit to becoming an equity investor in the project. He noted that such a substantial investment could have significant implications for public finances, particularly in light of expenditure limits imposed by European Union regulations.
The finance minister also raised questions about the anticipated benefits of the GSI, specifically its ability to lower electricity costs for consumers. He referenced a previous estimate from 2017 by Cyprus' energy regulator, which projected that operational costs associated with the GSI could reach 3.7 cents per kilowatt-hour. This figure has led to skepticism regarding the interconnector's ability to deliver the promised reductions in energy prices.
In addition to financial concerns, Keravnos mentioned a feasibility study conducted by an American firm on behalf of the government, which yielded discouraging results. In response to these findings, the government has sought an updated feasibility study, the results of which are still pending.
The GSI project is designed to enhance energy security and connectivity in the region, but the uncertainties surrounding its costs and potential benefits have prompted calls for further scrutiny. As discussions continue, stakeholders are awaiting more definitive information that could influence the project's future and its implications for consumers and public finances alike.
The ongoing deliberations highlight the complex nature of large-scale infrastructure projects and the need for careful consideration of both financial and operational factors before moving forward.