‘Compromised’ €400 million waste to energy incinerator tender moves ahead

The government has decided to risk proceeding with a €400 million compromised tender for a waste-to-energy incinerator in Maghtab despite strong advice that the process should be scrapped and started afresh.

Prime Minister Robert Abela has been warned about the possibility of an upcoming fierce legal battle after the Department of Contracts blundered and published confidential information during the bidding process.

But Abela, who is known to be taking a personal interest in the €400 million tender, has given informal instructions to carry on with the tendering process and to further extend the date of the final submissions.

Sources close to the process have informed The Shift that the tender’s evaluation committee, whose members are being kept secret, has concluded negotiations with the five shortlisted consortia and issued its technical specifications last week so they can come out with their best and final offers.

The final deadline has now been extended from its original 7 July date to the end of the month.

Sources said the extension was primarily intended to give bidders more time to gather information on their competitors and come up with a competitive final price to keep them in the race.

Out of the five shortlisted consortia, only one has a listed Maltese shareholder – the French Paprec Energies Consortium, in which local construction magnate, the Bonnici Group, has a 40 per cent shareholding.

The Bonnici Group is known to be very close to Prime Minister Robert Abela, who was the Group’s lawyer before taking office. Abela and his wife had also gone into private business with Gilbert Bonnici, the Group’s managing director.

According to indicative prices submitted during the tender’s first phase and which the Department of Contracts ‘mistakenly’ published – a move that ‘vitiated’ the entire process, the Bonnici Group’s consortium submitted an offer of €617 million – well above the lowest offer submitted by Urbaser S.A.U. – a Spanish recycling multinational partnered with a German equipment supplier.

Other international consortia also submitted lower offers than that of the Paperac/Bonnici consortium.

Sources said that they would not be surprised if the Bonnici-involved consortium were to suddenly alter its Best and Final Offer by hundreds of millions of euros to place itself in pole position.

The Shift has already reported that the public tender – one of the largest ever with a conservative estimated cost of €400 million – €200 for the plant and another €200 for its operation over the following 20 years – has been compromised.

That happened when the Department of Contracts erroneously published bidders’ indicative prices against public procurement rules – meaning that participating consortia were given crucial information on their competitors’ bids, which is now expected to skew the result of the final submissions.

This may lead failed bidders to contest the tender’s award and the tendering process in court, which would further derail the government’s time-frame already protracted time-frame.

Experts said that the government’s decision to risk going ahead with the process after it was vitiated, instead of starting over again, may also impact the country’s EU waste management targets if the tender is challenged in court, which, in turn, would lead to the imposition of heavy EU fines.