Appeal filed in court against €600 million Magħtab incinerator tender

Multinational consortium Hitachi-Terna has contested the award of a €600 million public tender for the construction of an incinerator at Magħtab, challenging a tribunal decision and taking the case before the courts.

The case had already been heard by the Public Contracts Review Board over the last month. The tribunal had dismissed the consortium’s complaint which raised issues with how the tendering process was conducted.

Hitachi-Terna, the second-place bidder, has now contested the board’s decision, raising the case before the Court of Appeals.

The public tender, one of the largest to be issued, was awarded in October to a French-Maltese consortium comprising energy company Paprec and construction contractors Bonnici Group.

Hitachi’s challenge to Wasteserv’s selection of the Paprec-Bonnici consortium led the case to be heard by the PCRB in multi-day sittings of record length.

The tendering process was the first of its kind in Malta since it included an additional negotiation phase between the government and the bidder after they submitted their offers.

Issues were first raised when the financial offers were revealed before negotiations were concluded. The move led several bidders to cry foul, labelling the process “irregular.”

After they were published, several bidders dropped out of the competition while Paprec-Bonnici adjusted their bid to take pole position.

In testimony at the PCRB, the government’s Department of Contracts overseeing the tender’s award claimed the move was done for transparency reasons.

Eyebrows were further raised given Prime Minister Robert Abela was previously a business partner of Bonnici Group’s managing director, Gilbert Bonnici. The group has received millions in direct orders in recent years.

Hitachi-Terna also argued that the Paprec-Bonnici consortium’s offer was not financially feasible and claimed conflicts of interest by members of the PCRB board.

These were among a raft of objections raised, all of which were shot down by the PCRB. The board claimed the Hitachi-Terna consortium was “trying to use all the arrows available in its quiver in the hope that some of its arguments stick.”

The tribunal’s decision to dismiss the complaint was welcomed by Wasteserv and the Department of Contracts. Wasteserv CEO Richard Bilocca had said the “unequivocal verdict shows that Wasteserv delivered a gold standard procurement process.”

In a press release last month, Wasteserv lamented the delays incurred on the project due to the appeal. They claimed it led to additional waste in the Magħtab landfill which could have been converted to energy.

The project had already been delayed for several years as the government’s initial tendering calls failed and land expropriation was challenged.

The objections now raised by Hitachi-Terna in court are largely similar to the ones evaluated by the PCRB.

The appeal was filed by Hitachi-Terna lawyers Adrian Delia and Matthew Paris. The Court of Appeals is now expected to issue a final decision on whether the tender was awarded through the proper means.