Government extends Grand Harbour concession without tender

The government has decided to drop the need for a tender and extend a public concession for ferry services between Sliema, Valletta and the three cities in the Grand Harbour, based on demands by the operators – Marsamxetto Steamferry Services Ltd –  a joint venture between the Zammit Tabonas and the Bianchi Group.

The decision, which has so far not been made public, has already faced objections by competitors. One of them, Supreme Travel, has officially asked the Public Contracts Review Board (PCRB) for an investigation and the annulment of the government’s ‘illegal’ decision.

With this decision by the government, a tender that was meant to be issued last year will now not occur before 2023, giving the current operator an advantage over potential competitors.

Marsamxetto Steamferry Services had won the public tender for an eight-year concession in 2012.

Rather than issuing a new call last year when the concession came to an end, the government decided to accept the demands for an extension by the current operators.

The company wanted 15 years

While the government is refusing to publish correspondence in which, according to Transport Minister Ian Borg, Marsamxetto Steamferry Services had asked for a 15-year concession, he admitted that the Cabinet had approved his recommendation so that the current contract is extended until 2023 without a fresh call.

The Minister has so far refused to publish the contract signed with Marsamxetto Steamferry Services. The ‘motivation’ used by the Minister to justify the government’s decision is that Transport Malta had failed to deliver on its commitments on time, including the provision of various landing places.

The Minister said this situation has prevented the private company from starting its operations and could mean that Marsamxetto Steamferry Services could file a court case against the government, claiming damages.

Minister Ian Borg argued that to avoid court litigation and possible damages, the government conceded another three-year extension to Marsamxetto Steamferry Services as compensation. He also said that the new agreement included the provision for an enhanced service, such as a ‘free’ bus service.

Competitors up in arms

Supreme Travel has filed an official objection, claiming that the government had no right to extend a public concession. The company argued that a new tender should have been issued and is asking the board to cancel the extension.

Replying to questions by The Shift, the CEO of Marsamxetto Steamferry Services, Edward Zammit Tabona, did not wish to comment in detail, saying the company “shall be making its representations before the PCRB”.

It is estimated that the Grand Harbour ferry service carries some 1.5 million passengers per year.

The government’s decision is the latest in a series that benefitted the Zammit Tabonas including the sale of public land by the Lands Authority so the Fortina Group the family controls could build office blocks, shopping facilities and residences on the Tigne seafront on land originally allocated for tourism purposes.

The Zammit Tabonas had already sold the office block in a multi-million euro deal with a leading international gaming company even before the Lands Authority had acceded to a concession to change of use on public land.

The deal was concluded when the Lands Authority was under the control of James Piscopo, the former CEO of the Labour Party, who at the time was in business with the Zammit Tabonas.