GWU lands €109 million jobless scheme deal despite cheaper rival bid

A company owned by the General Workers Union and other closely related financial and legal consultants has been awarded a lucrative government contract worth €109 million to manage the Community Workers Scheme for the next seven years, although it wasn’t the lowest bid.

A separate consortium, formed by EMCS Ltd, AX Group and Konnekt Search and Selection, submitted a bid for the running of the jobless scheme that was as much as half a million euros cheaper than the GWU’s.

Sources close to the tendering process told The Shift that the GWU’s consortium, called CWS Consort, was deemed “technically superior” to the other tenders. The GWU has managed the programme since it was set up in 2015.

Last May, The Shift reported that the tender was designed to favour the GWU (historically linked with the Labour Party) and that it was almost certain that the massive taxpayer’s funded scheme would be granted to the Union.

This has now been confirmed after the Department of Contracts announced that the deal had been won by the GWU. Their challengers – EMCS, Angelo Xuereb Group and Konnekt – have chosen not to exercise their right to appeal.

An appeal before the Public Contracts Review Board would have cost the latter some €50,000, which would not be refunded if the appeal were turned down.

Jobs for Votes scheme

The selection of the GWU for this tender means that the programme, popularly dubbed the ‘jobs-for-votes’ scheme, will continue to be administered by the same management it’s had since its inception.

Designed by the current Finance Minister Clyde Caruana in 2015, when he was at the helm of Jobs Plus, the scheme was devised to recruit the 600 long term unemployed people on the government’s books and put them on the State payroll on a full time basis until they’re sufficiently trained to find work in the private sector.

However, over the years, the programme has expanded significantly and had taken on around 1,100 recruits by last year. This is costing taxpayers some €16 million a year.

Critics of the scheme have pointed out that unemployed workers have been hired to do odd jobs at schools, local councils and NGOs, though the lack of supervision and low, or non-existent, observance of rules have brought allegations that some of the recruits were doing ‘extra private work’ on the side.

The programme has proved very popular in Gozo, with hundreds of workers having been assumed onto the State payroll through the scheme.

At the same time, those on the scheme are being counted as employed with the private sector – the GWU – thus skewing NSO statistics on the gainfully occupied and the number of registered unemployed.

Accountant Robert Borg’s many connections

The GWU, which gets a fee for every worker put onto the programme on top of its established administration costs, has designed a complicated commercial vehicle to administer the scheme and its profits.

The man behind this mechanism is accountant Robert Borg – the financial administrator of the GWU who’s also involved in many other business interests, including those directly linked to the Labour Party. Borg has leased his personal property in Hamrun to the union to serve as the scheme’s office.

An accountant by profession, Borg is one of the directors of District Operations Ltd and District One Ltd which form the CWS Consort.

While the GWU is the majority shareholder in District Operations Ltd, Borg and lawyer Aron Mifsud Bonnici are the owners of District One – the other shareholder in the scheme’s consortium.

The latter two are the sole directors of the company which owns 40% of the consortium’s shares.

GWU lawyer and District One co-owner Aron Mifsud Bonnici, is known as disgraced former minister Konrad Mizzi’s lawyer and aide due to his involvement in the latter’s most controversial projects.

Robert Borg is also the owner of B.E.D. Limited – a financial vehicle linked to the Labour Party which according to The Times has “fronted a draft consultancy deal that would have seen it receive up to €200,000 from 17 Black owner Yorgen Fenech.”

The 47-year-old is also involved in a slew of government companies and other private businesses.

Operating from the A3 towers in Marsa, the same building partly owned by the GWU, Borg is a shareholder in Asiatica Corporate Services Ltd, Hatfield Advisory Services Ltd, Reanda Malta Ltd, Truvisory Services Ltd and Uni-Pro Consulting Ltd.

He also served or is serving in many government entities, including Transport Malta, Social Innovative Projects Management Ltd, Kordin Grain Terminal and many others.

Borg, who also was on the evaluation board of the controversial privatisation of three public hospitals, having been nominated by Konrad Mizzi’s still serving permanent secretary Ronald Mizzi, has a finger or more in many other pies.

Currently he serves as a director on the boards of Gibraltar Trustees Limited, Central Cement Limited, Coin Exchange Ltd, Community Workers Scheme Enterprise Foundation (GWU); District One Ltd; District Operations Ltd (GWU);  GWU Holdings Ltd; GWU Property Holdings Ltd;  INews Malta Ltd (GWU); Jumbo Bags Ltd; LSW Ltd; Maltese-Italian Chamber of Commerce; Melita Training and Recourses Management Ltd (GWU); Postainsure Agency Ltd; SMS Corporate Services Ltd; Supreme Exchange Ltd; Union Press Company Ltd (GWU); Union Print Company Ltd (GWU); UniPro Consulting Ltd and Untours Travel Ltd (GWU).

His companies and interests have also been regular recipients of numerous direct orders from the government and its entities.