Government makes u-turn on Gozo fast ferry service after eight years of stalling

A full eight years following the governing Labour Party’s electoral pledge to introduce a fast ferry passenger service between Valletta and Mgarr Harbour in Gozo, the government has finally decided to open the project to competition after years of resistance.

A number of Request for Proposals (RfPs) and tenders issued over the years, in which the same potential operators were favoured for an ‘exclusive’ service, the government was forced into a U-turn to liberalise the market.

The move has already led to Virtu Ferries, which spent years battling the government’s intentions in legal battles, announcing that it would start providing its fast ferry services between Gozo’s Mgarr Harbour and the Grand Harbour through its catamarans from 1 June. It added that it is also contemplating building a new ferry specifically for this service “once the service is up and running”.

The long-awaited fast ferry service

As part of its 2013 electoral manifesto, the Labour Party pledged a fast ferry service to ‘alleviate the hardship of Gozitans’ who must travel to Malta daily.

When plans were launched, instead of inviting private operators to compete on this route, Transport Malta issued an RfP, followed by a Gozo Channel tender, to seek a fast ferry partner on an exclusive basis.

According to the call, the company providing the fast ferry could do this as a contractor of Gozo Channel and the government would subsidise the service through millions in taxpayer funds.

A Gozo Channel evaluation committee led by former Labour Mayor Anthony Valvo evaluated several bids and selected Virtu Ferries as having the best technical and commercially viable bid. The committee declared that the second bid, made by Islands Ferry Network – a joint venture between the Zammit Tabonas (Fortina Group) and Gozo tomato producers Magro Brothers – was some €9 million more expensive and the company did not have the required experience to provide such a service.

It seems this conclusion did not go down well with the Office of the Prime Minister, which instructed Gozo Channel to cancel its offer and invalidate the evaluation process.

Goalposts keep changing

A new ‘modified’ RfP was issued by Transport Malta and Gozo Channel following the cancellation. The evaluation committee was changed and disgraced former MFSA chief Joseph Cuschieri was made chairman.

Following new submissions, Islands Ferry Network was selected as the preferred bidder. Gozo Channel immediately signed a contract with the Zammit Tabonas-Magro consortium.

This latest development was met with resistance.  Virtu Ferries strongly objected to the ‘vitiated’ process before the Public Contracts Review Board. Later,  before the Court of Appeal.

The court declared that Gozo Channel’s deal with Islands Ferry Network was illegal, went against public procurement rules, and was vitiated.