Gozo Channel’s unused, leased premises belongs to former client of chairman Joe Cordina

The building leased as offices by Gozo Channel in 2019 for some €100,000 a year but never utilised is owned by a company that used to be a client of auditor Joe Cordina – the chairman of Gozo Channel.

The premises in Mgarr, site of the former Ta’ Miema Supermarket, was leased by the state entity from A & J Hili ta’ Miema Ltd.

Contacted by The Shift, Gozo Channel Chairman Joe Cordina, who owns an auditing firm in Gozo, confirmed that the company is a former client of his firm, and that he used to carry out auditing services for their business.

However, he played down any suggestion of a conflict of interest, insisting that the owners of Ta’ Miema ceased to use his services in 2016 and that he was not involved in the decision taken by the evaluation committee of the company.

Cordina, former Labour mayor of Xaghra and a general election candidate, has been serving as Gozo Channel Chairman since Labour came into government in 2013.

Last week The Shift reported that the Gozo ferry company has had to depend on massive subsidies from the government to keep afloat. 

Apart from massive losses attributed to the ongoing pandemic, the company was burdened with myriad additional operational costs, particularly due to the recruitment of scores of extra workers and the awarding of multiple “unnecessary” contracts.

The hiring of the supermarket premises raises significant questions of bad planning and waste of resources – after the building was leased, it was left abandoned for almost two years because the company doesn’t have the funds required to convert it into offices.

Gozo Channel sources described the latest lease as “another unnecessary expense to please someone using public funds,” and said that no money was available for its refurbishment.

Gozo Channel failed to reply to questions about the actual cost of the lease, its duration and why they are not being used yet.

Up to 2018, taxpayers were contributing around €700,000 a year in subsidies to keep Gozo Channel afloat. However, the company’s latest published accounts show that this amount rocketed to about €5 million in 2019. 

The accounts for 2020 are not yet published, but the government’s 2022 estimates make an allocation of €10 million in further subsidies for next year.

Meanwhile, the Public Service Obligation agreement, which allows for these subsidies according to EU state aid rules, came to an end in 2017 and has not been renewed.

The Transport Ministry, which is responsible for this tender, had said for the past four years that it’s still working on the issue of a new tender. This raises concerns over whether the subsidies given to Gozo Channel after the end of the PSO agreement are in line with EU state aid rules.

Featured photo: Gozo Channel Chairman Joe Cordina with former Gozo Minister and current Agriculture Minister Anton Refalo and disgraced ex-Prime Minister Joseph Muscat.