Taxpayers forced to pay almost double the market value for offices to be used by new Authority for Gozo

Taxpayers are being forced to fork out almost double the market value for the rental of office space for the newly-established Gozo Regional Development Authority, official documents show.

In a move that goes against the norm in procurement regulations, the Gozo ministry is awarding the five-year contract to the highest bidder instead of the lowest.

The Shift has looked into the tender issued last October by the Gozo ministry calling for some 350 square metres of office space in central Victoria to house the new Authority. The market value of this tender, established following research based on current market prices, was some €55,000 a year.

Yet after a long adjudication process, the tender was awarded to the highest bidder, Elzan Construction Ltd – a Gozitan company, owned by Francesco Ranier Grima, for almost €80,000 a year, which is far more than the established value and current market prices for similar properties in the same location.

Elzan Construction’s bid was €400,000 over five years. The lowest bidder, another Gozitan company called GTS limited, proposed €45,000 a year or €225,000 over five years.

In a move that is not typical in such tendering processes, the bidder that should have won the tender, GTS Limited – owned by Joseph Attard from Xaghra, withdrew the bid after being given the go-ahead to sign the lease contract, paving the way for Elzan Construction to grab the lease.

Replying to questions, the Gozo ministry confirmed that the tender was awarded to the highest bidder.  A spokesperson said the ministry was not at fault since it was ‘forced’ to award the tender to the highest bidder.

“Since the lowest bidder, despite winning, withdrew his offer at the eleventh hour, and the two other bidders were not compliant, the successful tenderer was Elzan Construction even though it had the highest bid.”

Apart from GTS Ltd, other bids were submitted by the Gozo Curia (€251,000) and Galabel Enterprises Ltd (€210,000).

Yet according to the ministry, the other two offers were not compliant.

As a result, over the term stipulated in the tender, taxpayers will be forking out €174,000 more than the lowest bidder.

The ministry had the option of annulling the tender and re-issuing it since the winning bid was far more expensive than the established market value. There was no explanation about the reason for the decision to press forward with Elzan Construction despite the exorbitant rates to be paid.