Two consortia accuse Minister Ian Borg of breaching procurement rules on Gozo tunnel project

A controversial project to construct an underwater tunnel between Malta and Gozo may already have been delayed by years as the first stage of the long procurement process has immediately hit a wall.

Two consortia, which according to Ian Borg’s ministry do not even qualify for the pre-tendering stage, accused the government of lack of transparency and of limiting competition in flagrant breach of public procurement rules. Both consortia are represented by lawyers intimate with the Labour Party.

Filing an appeal before the Public Contracts Review Board (PCRB), Labour MEP candidate and government consultant Charlon Gouder accused Transport Ministry and Infrastructure Malta of “acting contrary to public procurement rules” and of “irregularities” when it failed to shortlist his clients – Malta-Gozo Fixed Link Ltd.

This consortium, headed by Luke Chetcuti, son of the late Hugo Chetcuti, also includes Alberta, a company of the Mizzi Organisation, RMS Ltd and CE Holdings.

According to Gouder, the pre-qualification questionnaire issued by the Transport Ministry was valid for 120 days, but the ministry and Infrastructure Malta extended it without notice or justification and in breach of the law.

Gouder also said the reasons given by Borg’s ministry to axe his client’s consortium at the pre-qualification stage were unfounded.

Together with lawyers Lara Borg from novolegal and Shaheryar Ghaznavi, Gouder asked the PCRB to either order his clients to be re-integrated in the process or cancel the process and declare it illegal.

A second appeal was filed by another disqualified bidder – CGYI Malta Gozo Consortium – represented by DF Advocates, a firm that has received a number of direct orders from the Labour government and led by Kevin Deguara and Jean Farrugia. They accused Borg’s ministry of “failing to ensure genuine competition and maximum participation” in the project’s and the country’s interests.

While, according to DF lawyer Jonathan Thompson, the evaluation committee set by Minister Borg should have requested clarifications when in doubt, it failed to do so.

The appeal states that the consortium was disqualified on a “typographical error”, which should have been easily corrected through the same procurement system.

“It is in the public interest that all eligible participants are allowed to participate in a competitive process, particularly a process of the scale and scope of the present project,” DF Advocates insisted.

“This is more so in the current scenario, where should the present objection not be upheld, the next stage of the competitive process will proceed with the involvement of only one participant, which is clearly against the interest of the general public and does not ensure genuine competition and maximum participation.”

Both consortia have paid €50,000 each to file their appeal.

Choice of one bidder at this stage limits government’s hand

After years of studies, plans and political rhetoric about this possible tunnel connecting the two islands, last year a first call was made to assess interest in the eventual concession to build the proposed 14-kilometre tunnel.

While the process in this first stage had to be concluded by October 2020, it took the government another year to make its first, now highly contested announcement.

Last week, the Transport Ministry said that out of the four bidders showing interest, only one qualified for the next stage of the process.

‘Equitix-Itochu-Yapi Consortium’ formed by a UK investment firm, a Japanese company and Turkish construction firms was announced as the only suitable potential bidder.

Through this decision, the government bound itself to proceed to the next procurement stages – two in all that are expected to take years – and negotiate this massive project with just one bidder. This puts the government in an awkward position, having no room to manoeuvre on such a large scale national project.

Will it ever happen?

While the tunnel project has been on the national agenda for decades, with this latest process starting in 2012 – almost a decade ago – there is no timeframe on when and if this controversial project will eventually see the light of day.

Last week’s announcement by Minister Borg is typical of commitments before a looming election when governments try to reinvigorate the debate to lure those Gozitans in favour of this tunnel project to vote for them.

While the possible construction of a tunnel between the two islands is highly debatable, particularly from an economic and environmental point of view, both Labour and the PN have committed to the project.

Yet no time frames were ever given, and no decision has been taken on whether this will be given the green light following some form of referendum involving only Gozitans or the whole population.

While some feel that the permanent link is essential for the survival of Gozo’s economy, others are vehemently against the idea, believing that Gozo is already well served with sea connections and that a tunnel will be the last straw to destroy the tranquil island.

An eventual decision by the PCRB rejecting the two appeals can be challenged in the appeals court.