Ferry service providers at war over latest call for lucrative 15-year concession

The latest government attempt to award an exclusive concession for ferry services between Malta and Gozo has led to legal wrangling between Virtu Ferries and Marsamxetto Steamferry Services Ltd, an interested party in the lucrative 15-year concession.

Both the government, through Transport Malta, and Marsamxetto Steamferry Services Ltd, a partnership between the Zammit Tabonas’ Captain Morgan and the Bianchi Group of Companies, have replied to the objections raised by Virtu Ferries, insisting they are “baseless” and should be rejected.

Last week, The Shift revealed that Virtu Ferries had filed a pre-closing remedy with the Public Contracts Review Board (PCRB) asking for the Transport Malta call to be cancelled, claiming “serious illegalities” and disregard of EU law.

Virtu Ferries claimed that “the Request for Proposals (RfP) document…is so ill-conceived and so fraught with such a great number of manifest and serious illegalities that any reasonable Board should order the outright cancellation of this RfP.”

It was also noted that this was the third attempt by Transport Malta to introduce such a service, and had now departed from the government’s pledge to introduce a fast ferry service between the two islands, as promised by Labour in 2013 and 2017.

Potential bidders hit back

In a reasoned reply submitted to the PCRB, Marsamxetto Streamferry Services accused Virtu Ferries of seeking to nullify this initiative in order “to retain its market dominance and strengthen its monopolistic position to the prejudice of the public interest”.

The company announced its interest in submitting an offer to provide this ferry service, criticised Virtu Ferries’ legal action saying it was based on “conspiracy theories involving previous tenders which are totally irrelevant and out of place”.

While asserting that it agreed with the scope of this RfP and that there is nothing illegal in it, Marsamxetto Steamferry Services claimed that Virtu Ferries is trying to stop the process to protect its own business interests.

“Unfortunately, Virtu’s ulterior motives are immediately revealed in its introductory arguments, which imply that Virtu would like to steer the authorities back to previous tenders in which it had participated, and which had subsequently been cancelled,” Marsamxetto Steamferry Services said in its submission.

Failed commitments, questionable promises

During the 2013 and 2017 elections, the Labour Party had promised to introduce a fast ferry service between Gozo and Malta to make the crossing of passengers between the two islands less time consuming.

As part of this initiative, two calls were issued by Transport Malta to subsidise a fast ferry service, along with traditional vessels.

Both calls were then cancelled by the government at the eleventh hour. The latest following a decision by the Courts to strike down an illegal agreement between Gozo Channel and Captain Morgan.

Transport Malta says objections are ‘baseless’

Transport Malta defended its actions, insisting that the latest RfP issued a few weeks ago is legal and does not infringe upon EU rules.

The Authority insisted that the latest call had nothing to do with its previous two calls requesting the introduction of fast ferry services and which, after years of submissions and evaluations, have been cancelled by the government.

Saying Virtu Ferries objections are “baseless”, Transport Malta insisted that the latest initiative is aimed “to shift away from the traditional mode of transportation, to a mode based on an efficient and reliable sea alternative”.

While Transport Minister Ian Borg has declined to explain how the promised fast ferry service will be put in place, Transport Malta issued a new RfP.

The new call eliminated the fast ferry service option and instead asked for the provision of scheduled sea passenger ferry services at unidentified points in Malta and Gozo.