Court has thrown out the process used to award a €600 million contract to build a waste-to-energy incinerator plant, citing conflicts of interest that tainted the evaluation of bids from the very start.
The Court of Appeal ruled on Thursday that members of the tender evaluation committee and the review board that adjudicated the high-stakes contract had improper conflicts that should disqualify their decisions.
Last year, the French waste management specialist Paprec, in collaboration with the Maltese construction firm Bonnici Bros, had been selected to build and operate of a waste-to-energy plant in Magħtab, Malta.
The ruling comes after WasteServ, the agency overseeing the procurement, had staunchly defended the integrity of the process in the face of an appeal by losing bidder Hitachi Zosen Inova AG-Terna S.A.
In November 2023, WasteServ issued a statement “firmly rejecting” Hitachi’s claims and insisting the procedure adhered to “best practices in public procurement and good governance.” The agency highlighted the vital importance of the incinerator to transition Malta away from environmentally harmful landfilling of waste.
Hitachi, which originally bid €781 million for the project versus the recommended €600 million bid from a French-Maltese consortium, raised concerns about scoring criteria, eligibility determinations, and WasteServ’s estimates. But the agency defended the decisions at length.
WasteServ also touted oversight from global consultant COWI and a UK firm that “concurred” the “procurement has been undertaken in a timely, efficient, and equitable manner.”
Despite WasteServ’s assurances, the Court of Appeal found inexcusable conflicts with the evaluation process.
Hitachi’s lawyers successfully argued that the composition of the evaluation committee was irregular under public procurement rules. This included Stephanie Scicluna Laiviera simultaneously serving on the committee while also working as a procurement manager for WasteServ itself.
The court agreed Scicluna Laiviera’s dual roles violated regulations and “as a consequence, all decisions [the committee] took were irregular too.”
Conflicts were also found with members of the Public Contracts Review Board that rejected Hitachi’s initial appeal, including a former Enemalta director and another with ties to companies linked to WasteServ.
“The court…declared the decisions of the revision board in this case as being null,” the ruling stated.
The scandals surrounding the procurement process reach back years. In June 2023, the news outlet The Shift reported the tender would likely need to be cancelled or reissued after the Department of Contracts improperly published confidential pricing data from bidders while competitive negotiations were still ongoing.
The leak divulged sensitive information to rivals before final offers, in what former MP Jason Azzopardi alleged was a “planned mistake aimed to give an advantage to a particular company close to the Prime Minister.”
There were also lingering ethics concerns around the once-frontrunner consortium that included Bonnici Brothers, whose owner Gilbert Bonnici is a former business partner of Prime Minister Robert Abela’s family.
This year, a Bonnici Brothers-owned company, United Equipment Co. Ltd (UNEC), won the Enemalta contract, to build a new emergency electricity plant cost worth €37 million.
The group is led by managing director Gilbert Bonnici, a former business partner of Prime Minister Robert Abela and his wife Lydia who built a block of apartments in Iklin together a few years ago.
With the court ruling nullifying the entire process, a new evaluation committee will now be appointed to restart bidding from scratch for the half-billion euro project crucial to Malta’s waste management plans.
