The State Fair Authority board appears set to go ahead with an indefinite suspension of its activities.
According to sources, the decision was prompted by the authority’s inability to balance it outgoings with its income under what they described as the inflexible way it is currently organised and operates, something they also said acts as an obstacle to innovative proposals.
The board within the coming days is expected to take suggestions about the authority’s future before Commerce Minister George Lakkotrypis, with closing down the authority at the top of the list.
Lakkotrypis will then formulate the final proposal and take it before the Cabinet for a vote.
According to the sources, the authority’s new board since appointed two months ago has been trying to deal with a deluge of obligations including costs of €1.2 million and €5m in non-serviceable loans.
As a consequence, the authority was unable to pay staff salaries, leading to zero cash flow and increased debts.
Although the issue seems to be unsalvageable now, the authroity has had great difficulty in covering its needs for the past four years.
The sources blame the current situation on mismanagement over a series of many years along with a lack of proper planning.
The board has over the past month had separate meetings with the Commerce and Finance Ministers to express their concerns.
Also, prior to its decision to suspend activities, the board had wanted to reduce employee costs by two thirds but could not go ahead due to lack of funds to cover a voluntary retirement scheme.
The authority was also unable to make any employees redundant.
The sources said that only by suspending the authority’s activities would the state be in a position to move its staff to other departments.