Freeport’s owner wins Freeport tender after last minute changes

Foul play is being suspected over the award of a multi-million-euro government tender for the installation of an Energy Efficient High Voltage Shore Connection System at the Malta Freeport Terminals.

The tender, with an estimated market value of €12.7 million and financed mostly through EU funds, was meant to have been determined through a bidding process closing on 22 March at 9.30 am.

But the goalposts were changed at the last minute, and a previously precluded two-week extension to the bidding period was granted, according to the tender document.

At the end of the process, the tender was awarded to Shining Star Infrastructure and Construction Ltd, a Netherlands-registered company, for a value of €10.4 million – more than €2 million lower than the price that the government had estimated.

Investigations by The Shift confirm that the Turkish shareholders of the company that eventually won the tender are also the shareholders of Malta Freeport Terminals.

Sources close to the tendering process claimed that the last-minute change extending the bid’s deadline by two weeks, less than an hour before it was due to close, was more than “odd”.

By that time, some of the bidders had already made their offers and had released confidential financial and technical data.

It is not yet known which of the participants had already submitted their bids when the announcement of an extension was made. However, Shining Star, which eventually submitted the winning bid, was not one of them.

According to tender documents seen by The Shift, the government, through the Department of Contracts, had outright refused the possibility of an extension to the tender’s original deadline.

In a clarification note issued by Jacqueline Gili, on behalf of the government on 22 February, in response to a request for an extension, she made it clear that no extension for the submission of bids was to be allowed.

Gili had written, “The Contracting Authority, being aware of the complexity of the project and the tender submission requirements, set the tender submission period of 80 days, a period which is deemed sufficient. Hence the Contracting Authority cannot accede to your request.”

Things suddenly changed when, just 45 minutes before the 22 March 9.30am deadline, a surprise extension was suddenly announced.

This was confirmed by the spokesperson for the Department of Contracts in reply to questions from The Shift.

“Yes, this can be confirmed,” he said.  “Extensions had to be carried out at the eleventh hour due to a system error following an update on the same ePPS (electronic tendering) system.”

The spokesperson said all prospective bidders were provided with an explanation and necessary instructions once the changes to the deadline were announced.

Asked whether it was also a coincidence that at the end of the process a company whose shareholders own the Freeport Terminals ended up securing the tender at a price well below the project’s value as estimated by the Department of Contracts, the spokesperson insisted there was nothing in the rules which preclude such an eventuality.

He also specified how the project is owned by the Malta Freeport Corporation, the government regulator of the terminal, and not the private company which owns the terminal itself.

The Malta Freeport Corporation falls under the political remit of Economy Minister Silvio Schembri and includes among its government-appointed directors several Labour loyalists such as  Frederick Azzopardi, Claudette Abela Baldacchino and Aleander Balzan.

Sources close to the tendering process told The Shift, “The price submitted by Shining Star does not even cover the project’s costs, and a number of variations are already being contemplated for the implementation phase, so all the potential losses would eventually be covered.”

The project will see ships berthed at the Freeport switching to electric power provided from shore instead of keeping their engines running while stationary and emitting clouds of pollution in the process.

Estimated at €12.7 million, the winning bidders submitted an offer of €10.4 million.

Shining Star Infrastructure and Construction Company Limited are owned by New World Infrastructure and Construction Holding BV, which is registered in the Netherlands and better known as Yildirim International, which also owns the Malta Freeport Terminals. Ozer Oz, a Turkish citizen, and Roberto Stivala are the company’s directors.

Other bidders had submitted much higher offers.  Power Works Joint Venture, for example, submitted two different bids – one €14 million and another €17.3 million – while Sis Enerji Uretim AS submitted a bid of €14.5 million.

No objections were lodged by the stipulated deadline to lodge an appeal with the Public Contracts Review Board following the tender’s award to the Freeport Terminal’s owner.  The submission of an appeal carries €50,000 price tag, which is deemed prohibitive for many bidders.