Ian Borg, TM chair personally handled €500,000 metro promo procurement

Tista’ taqra dan l-artiklu bil-Malti

Former transport minister Ian Borg and former Transport Malta (TM) chairman Joseph Bugeja personally intervened to discuss, approve and negotiate the costs associated with a 14-day metro system exhibition held at the end of 2021, according to the National Audit Office.

Confirming The Shift’s exclusive on how the government broke all public procurement rules by giving out some 20 different direct orders to events company TEC Ltd, the supplier of all the Labour Party’s mass events, the NAO has also discovered that negotiations with the supplier were handled directly by the Transport Malta chairman without the approval of either the finance minister or the agency’s own procurement committee.

In damning findings published on Monday, the NAO said that while expenses for the exhibition inaugurated by Prime Minister Robert Abela were to have been capped at €400,000, it ended up costing taxpayers over €550,000.

Moreover, all the procurement for the event was contracted through direct orders that were personally negotiated by the TM chairman.

“Correspondence by the then minister Ian Borg endorsed a proposal made by TM Chairman (Joe Bugeja) to revise the exhibition costs downwards to a maximum of €400,000,” the NAO found after TEC had initially given TM a quotation of €474,000.

But the NAO found after the event that TEC Ltd had been paid €503,851, which, together with payments for other suppliers totalling €44,331, exceeded the event’s budget.

The NAO also found that negotiations with TEC “were handled by the Chairman (Bugeja), and the procurement committee subsequently approved payments”.

“Approval for engaging the main service provider (TEC Ltd) by direct order was not officially sought through the Department of Contracts or the Finance Minister,” the NAO underscored.

The NAO audit did not delve into whether Bugeja was following direct instructions from Minister Ian Borg when dealing with TEC Ltd.

The Shift has already revealed that TEC Ltd had incidentally supplied the tents and other requirements for Ian Borg’s personal electoral campaign, which was held just a few months after the metro exhibition.

Procurement through direct orders

Focusing on the almost €27 million spent in procurement by TM in 2021, the NAO audit found that in most cases, even when contract values exceeded €1 million, procurement was being carried out by direct order in clear breach of the law.

According to TM officials, the course of action was undertaken because of “urgency”.

“The list of direct contracts provided included expenditure, such as for consultancy work and survey costs (the latter having been carried out by pollster Vince Marmara), for which the NAO could not understand the nature of urgency,” the audit found.

“Procurement had also sometimes taken an unconventional route, namely when the Chairman (Joe Bugeja) handles substantial self-procurement,” the audit said.

Uncovering the blatant abuse, the NAO found that to engage some 51 clerical staff, two service providers were paid almost €3 million by direct order. It was found that when these clerks were on sick or vacation leave, the private companies still charged TM for their services and, in many instances, still received payment.

In May 2021, the government launched a major road network clean-up, for which TM asked the Department of Contracts to provide eight different direct orders of €150,000 each – 15 times higher than the €10,000 limit.

After a negative response from the Department, which had seen no justification for the direct orders, TM nevertheless proceeded with issuing the direct orders for the work after lowering the values.

Through a raft of other examples, the NAO concluded that TM completely bypassed the rules while spending millions of euro of public funds.

Following the last general elections in March, Ian Borg retained his Cabinet seat. Still, he was side-lined to the foreign ministry – far from tenders and direct orders, while former TM Chairman Joe Bugeja was removed and replaced.

The ministry now responsible for TM, headed by Aaron Farrugia, told  the NAO that over recent months “all direct orders unless for  urgent procurement” had been stopped and that “reflections are underway on measures conducive to better governance within TM through strengthening the internal audit and procurement functions, as well as through changes to the structure of the organisation.”