Cyprus digital ID contract attracts scrutiny from auditors

An electronic ID card procurement contract in Cyprus has found itself under scrutiny after an audit revealed close ties between the contractor and the government official in charge of the program.

The state audit office is examining a decision by the Deputy Ministry of Research, Innovation and Digital Policy, Nicodemus Damianou, to directly award the 3.85 million euro (US$4.5 million) eID agreement to JCC Payment Systems without holding an open tender.

The contract was awarded in October 2024. A search of Damianou’s LinkedIn page shows the Deputy Minister served as Executive Director at JCC Payment Systems before his appointment for government office.

Speaking to media, Damianou described the report as “unfortunate, to say the least.” The development of the project was the result of “institutional and technical procedures that began in 2017 and were completed in 2025,” while the Deputy Minister was still employed at his previous company.

The Ministry also argues that there were no other companies with the necessary certification to carry out the project. The company that won the contract was an approved Electronic Identity Provider that had completed an audit based on eIDAS regulation.

In its report, Auditor General Andreas Papakonstantinou notes that EU companies could have participated had a standard open tender been held, potentially leading to a more competitive price. Even with no open tender, the Ministry could have made an announcement to allow other companies to submit objections or offers.

“The need for these ID cards was known well before the legislation allowing their issuance was passed in 2021, so the claim of urgency does not hold,” the audit says.

The audit revealed that the contract’s original value of 3.9 million euros ($4.5 million) was reduced to 3.85 million euros following a negotiated 50,000 euro ($58,900) discount.

The Evaluation Committee approved the contract in January this year. Despite the launch, the audit found that fewer than 10,000 ID cards had been produced by that point.

Article Topics

Cyprus  |  digital ID  |  e-ID  |  government purchasing  |  JCC Payment Systems  |  procurement