Minister says tender for fourth Gozo ferry now to be published by September

The Greek owners of the 35-year-old MV Nikolaos, which has been standing in as Gozo Channel’s fourth ferry since 2019, will continue making some €10,000 a day from the lease as the Gozo Ministry continues to bungle the multimillion-euro Public Service Obligation.

Gozo Minister Clint Camilleri told Parliament this week that a new tender for the fourth ship on the fleet will be published in the second or third quarter of this year, meaning anytime between now and the end of September.

The delay is the latest setback in the debacle that saw the owners of the current fourth ferry – Ionies Grammes Shipping Company, which operates ferry crossings between various ports in Corfu and other small Greek islands – opting to not even participate in the last tender for the service published last November because it appeared to have been deliberately impractical.

Gozo Channel issued its new tender for the lease of a passenger ferry last November, but the fact that it stipulated the new service would have to be up and running within the space of a mere two months was considered as being highly impracticable for anyone but the incumbent contract holders.

The 35-year-old Ro-Ro passenger ship has been serving as Gozo Channel’s fourth vessel since 2019 at a cost of approximately €8,000 a day in the off-peak months and €12,000 a day during peak months. Gozo Channel bears the fuel costs.

The 2011 Public Service Obligation (PSO) agreement, which had the European Commission’s blessing, elapsed in 2017 but a new tender was not issued until November 2022.

That last tender, however, has been described as “a joke” by sources close to Gozo Channel who spoke to The Shift, who say the tender’s impractical terms were drawn up for the Greeks to stay on board.

The tender had closed on 15 December without a single bid being placed

The two-month deadline was highly implausible, and Gozo Channel had not even specified a maximum vessel age in the tender to limit competition with Ionies Grammes Shipping Company’s ageing ship.

The company, in fact, did not bid on the tender. Nor did anyone else, which left the company able to ask for even higher rates than those stipulated in the tender and the current €3.5 million a year PSO price tag.

While Gozo Channel has been chartering the MV Nikolaos since 2019 through a direct order that was in breach of EU procurement rules, it had issued a tender in November for the lease of a fourth passenger vessel – to be up and running within a mere eight weeks.

The European Commission, which is meant to approve all subsidies given concerning Public Service Obligations, had been pushing for the tender for three years and has even threatened the government that it would begin infringement proceedings over the issue.

But by publishing the tender as late in the day as possible, no potential bidders were enticed to make an offer. Gozo Channel had to issue a new direct order for the incumbent Greek shipping company with the argument to the European Commission that it had tried but the tender had been unsuccessful.

While introducing a fourth vessel to Gozo Channel’s fleet has made the service more efficient at peak times such as in August and on public holidays, government sources have admitted Gozo Channel cannot afford the luxury of having a fourth ferry year-round.

With Gozo Channel already in dire financial straits, the government has had to inject millions of euros from the public coffers into the company to keep it afloat after mismanagement and sleaze plagued the company for years.