Gozo Channel tries again: ferry tender published with same tight timeline

Gozo Channel has after years of delay published a call for tenders for the supply of a fourth ferry.

The contract is for one year and is valued at a total of €3.5 million excluding VAT, the same price currently being paid to the owners of the Greek MV Nikolaos, and with the same tight deadlines that saw the last attempt fail in what some say was an intentionally orchestrated move.

The contract – a Public Service Obligation for the transport of passengers, vehicles and goods between Malta and Gozo – has been in the making for over five years and it will be able to be renewed for two further six-month periods.

Bids will be opened on 29 August and the chosen operator will need, according to the tender document, to begin operations not later than four weeks from the signing of the contract, which will go to the cheapest offer that satisfies administrative and technical criteria.

The new tender follows a disastrous attempt last November when no bids were lodged after bidders appeared to have smelled a rat.

The owners of the current operators of the fourth ferry – Ionies Grammes Shipping Company, which operates ferry crossings between various ports in Corfu and other small Greek islands – opted to not even participate 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.

By the looks of the new tender, the timeframe appears to be pretty much the same, with the winning bidder being obliged to start the service within a month of signing the contract and with tenders being opened in around five weeks from now.

The current 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.

The last tender, which closed on 15 December without a single bid being placed, was 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 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.

Gozo Channel has been chartering the MV Nikolaos since 2019 through a direct order in breach of EU procurement rules 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 last November, and as appears to be the case this time around, 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.