Stivala Group files objection after govermnent cancels Chalet concession

A  concession to rehabilitate and run the iconic Chalet in Sliema has been cancelled by the government, prompting the sole bidder, Stivala Group, to challenge the decision in front of the Public Contracts Review Board (PCRB)

The latest in a line of government concessions decisions to be challenged in front of the PCRB, the project was dropped suddenly two years after the process to grant a 65-year-concession to the historical site was launched.

Built in 1926, the Chalet was once an iconic dance hall, but it closed in 1963 and was left to fall into ruin. Various administrations over the last 60 years have made attempts to re-develop the site but with no concrete results.

In 2022, the government issued a Request for Proposals to see the site handed over to the private sector for 65 years. The request asked for an initial investment of €3.2 million in the venue and a further €3.2 million after the concession’s first 28 years.

In addition, the concessionaire would have to pay some €6 million in ground rent over the concession period.

The call for interested parties attracted little attention, with the Stivala Group being the only one to make a bid. With an offer of €8.4 million, the group intended to rehabilitate the site and develop a new catering and entertainment establishment.

Stivala’s only offer was slightly over the €8 million minimum concession fee asked for by the government.

Still, after months of evaluation, Stivala’s bid was dropped altogether as, according to the Office of the Prime Minister’s (OPM) evaluation committee, “the offer was not technically compliant”.

The decision, still not explained by the government, took the large developers completely by surprise, prompting them to file a formal objection aimed at reversing the government’s decision.

In their submission to the PCRB, the Stivala Group, led by Malta Development Association (MDA) President Michael Stivala called for the revocation of the government decision and the assignment of the concession to them.

The Group’s lawyers, DalliParis Advocates, insisted that their bid was wrongly evaluated by the OPM’s selected evaluation committee and that the government’s decision to cancel the tender was illegal and should be revoked.

The government is already facing significant scrutiny over multiple alleged irregularities in its awarding of tenders and concessions, with multiple ongoing objections being dealt with by the PCRB in the last three months alone.

These include two objections filed against the awarding of a concession for the Evans Building in Valletta to the consortium of the Decesares of the Eden Leisure Group and Mark Weingard of the Iniala hotel, and the concession for a waste incinerator plant in Magħtab.