Ic-Caqnu set to lose out as new €40 million landscaping contract to be awarded soon

Pressure is mounting on the government from business quarters, particularly large contractors, over a lucrative €40 million landscaping contract to be decided in the coming weeks.

After almost 20 years in which the contract to maintain public areas and roundabouts across the island with flowers and greenery was held by Environment Landscapes Consortium (ELC), the multi-million deal is now up for grabs. ELC is led by Charles “ic-Caqnu” Polidano.

Several major building contractors have formed consortia to vie for this tender, which apart from being worth some €10 million a year in itself, will come with many additional sweeteners. These usually take the form of millions of euros in ‘extra’ direct orders.

The successful bidder will be given a 5-year contract, starting in 2023.

This tender was finally issued almost four years after a damning report by the National Audit Office (NAO) stating that the continuous renewals of this contract without an open call for bids was illegal.

The NAO had also highlighted various irregularities in the implementation of the contract, including waste of public funds and duplication of work among many other issues.

Censu n-Nizz in pole position

Investigations by The Shift show that by the time of the closure of bids for this new tender, which also comes with the obligation of employing some 200 government employees seconded to do this work with the ‘private sector’, it appears clear that the ELC is about to lose this contract.

The consortium is led by Polidano, and includes Boris Farrugia, Calamatta Landscapes, Antonella Ltd – a company owned by Polidano and Adrian Salomone – and Green Supplies Ltd as shareholders. The group are asking the government for €86 million over five years, when the actual costs quoted by the government are only €41 million.

The ELC’s bid is some €52 million higher than the cheapest one, submitted by newly-formed consortium, GEB landscaping.

The Shift is informed that the latter group is led by V&C Contractors – owned by Vincent Borg known as Censu n-Nizz– and includes Derek Garden Centre, the Ozo Group which includes the Zammit Tabonas of the Fortina Group, and Sicilville SRL, a Sicilian landscaping company.

Sources close to the process told The Shift that Borg has been lobbying intensely with various ministers, particularly Minister Ian Borg, to push for his consortium to take over this lucrative contract.

Borg, a chief canvasser of PN MP Beppe Fenech Adami up to 2013, switched to Labour soon after the election. Since then he’s been awarded, through tenders and direct orders, contracts for major multi-million road construction works, including the controversial Central Link.

Borg has now become one of the largest road contractors on the island and is involved in many business ventures including in the retail, catering and hospitality sectors. He is also the owner of an irregular tarmac batching plant in Naxxar and a massive dumping quarry in Siggiewi, blamed for causing major environmental hazards.

However, according to the sources, Borg’s quest for this tender might be in peril due to a very close bid by a rival consortium, GP Green, which might be considered as technically superior to GEB’s offer.

With a price tag of €34.4 million, less than a million difference with the cheapest bid, GP Green is led by contractors GP Borg Group together with Callus Garden Centre.

The Naxxar-based contractors are also said to be very well connected within government and are considered to have more experience that the V&C Group.

Winning various government tenders over the past few years, including the building of new schools, they were also the contractors for the Pama shopping village and the Tigne Point towers.

Interestingly, a Chinese state company – China Machinery Engineering Corporation is also vying for this tender, although its bid is considered to be too expensive at almost €55 million.

The ELC story

The first of Malta’s Private Public Partnerships, the ELC was formed after a 2002 agreement negotiated by then PN Finance Minister John Dalli.

At first, the innovative project made a significant transformation in Malta’s public areas, turning whole stretches of derelict areas next to the island’s main thoroughfares into colourful gardens.

However, as years passed, the project came under harsh criticism as new projects had become few and far between and enthusiasm waned.

Still, particularly due to the state employees seconded to this project, the government continually renewed the contract, instead of putting it out for tender, in breach of public procurement laws.

In its 2017 report, the NAO said that while some €100 million were paid to the consortium over the years, there were doubts about the government’s capacity to negotiate, implement, and monitor the contract to ensure value for money.

“Questions arise regarding the financial and economic considerations revolving around this PPP agreement. Benchmarking exercises revealed that the contractual rates are not favourable to the government,” the NAO said.

The NAO had also found that no bank guarantee by the consortium was ever put in place and that various parts of the contract were not observed by the private consortium.