Auditor General asked to investigate controversial Evans building concession

Auditor General Charles Deguara has been asked to investigate Thursday’s decision to grant a concession to develop the former Evan’s building in Valletta into a hotel to a consortium formed between the owners of the Eden Leisure Group and Iniala Hotel.

The concession was awarded despite Eden/Iniala’s bid not conforming to the contract bidding requirements, technically resulting in the lowest financial offer for the 65-year concession.

The request for an investigation by the National Audit Office was made by former Nationalist Party MP Jason Azzopardi, who called for urgency in his letter to the AG, claiming the “process stinks to high heaven.”

The Shift has reported extensively on the Evan’s building concession, including how the Eden/Iniala consortium was widely predicted to have been the Office of the Prime Minister’s ‘favourite’ for the project, before the tender had been issued.

In his letter, Azzopardi noted that the concessions’ award could result “in a potential criminal act, if it results that the concession was a ‘done deal’.”

The two other bidders, Paul Attard’s Katari Hospitality and a consortium between Iconic Malta Ltd. and international hoteliers Nobu have 20 days to object to the decision. In the case of an objection, the contract will be reviewed before the semi-judicial Public Contracts Review Board (PCRB).

In the eventuality of a PCRB decision, it may be appealed again in front of the Court of Appeals.

A call for proposals for the concession was first issued in November 2022, in a process that will eventually see the iconic and idyllically placed government building turned into a 5-star hotel.

Bidders first raised issues with how the privatisation process was handled the following year.

The Eden/Iniala consortium, dubbed Valletta Luxury Properties had submitted a bid of just €1.2 million. The initially unexplained offer paled compared to Katari Hospitality’s €40.7 million bid and Iconic/Nobu’s €39.3 million offer.

In a clarification published through an article in Malta Today, Valletta Luxury Properties claimed the submitted offer was the yearly amount to be paid over the 65-year concession, resulting in a €78 million bid.

Despite the clarification, the Valletta Luxury Properties’ bid did not conform to the Department of Contracts requirements. The situation raises questions on why the OPM chose to keep on the consortium’s bid, forge ahead with the process, and eventually awarded the concession.