€600 Million Magħtab Incinerator Tender Scrapped Over Conflict Of Interest
All the bids to build a waste-to-energy plant in Magħtab might need to be reconsidered and re-evaluated after the court threw out the previous €600-million tender winner.
Today’s decision comes after a legal battle which was triggered by unsuccessful bidder Hitachi-Zosen Inova AG – Terna SA, who had filed an appeal last year after the contract was awarded to consortium of French waste giants Paprec and Malta’s Bonnici Brothers.
Back in February, that appeal was lost, but earlier today, the Court of Appeal found members of the original panel and board had a conflict of interest.
As reported by Times of Malta, members of the Tenders Evaluation Committee and the Public Contracts Revision Board – namely Stephanie Scicluna Laiviera, Kenneth Swain and Vincent Micallef – were pointed out by Hitachi as having a conflict of interest or breaking regulations.
Swain was a former director of Enemalta – which had a power purchase agreement with WasteServ – while Micallef was a director of ClearFlowPlus plc, which (much like the other two companies), had Malta Government Investments as its shareholder.
Today, the court upheld Hitachi’s pleas, while also clarifying that it did not believe Swain or Micallef personally benefitted from the decision or had any intention to breach good governance norms.
Another plea which was upheld today was that Scicluna Laiviera stood on the Tenders Evaluation Committee in breach of public procurement regulations… since she was also on the list of members of the Public Contracts Revision Board and worked as Wasteserv Procurement Manager.
In fact, by that point, the court said it didn’t even need to consider the alleged conflict of interest of yet another member, Charlon Buttigieg.
At the end of the day, the tender awarded to Paprec-Bonnici Bros (and the revision board’s decision) was declared null.
Ordering that a new adjudicating committee be formed to consider the bids for the waste-to-energy plant, the court left it up to WasteServ to decide “whether to further pursue the current procedure by appointing a new evaluation committee”, a judgement the company said it will be analysing “to decide the best way forward”.
The planned waste-to-energy facility should process 192,000 tonnes of non-recyclable waste per year (essentially most of Malta’s black bag waste), with the intention of incinerating and converting into heat that can generate energy.
Beyond the previous €600 million winners Paprec-Bonnici Bros for the building and operation of the Ecohive facility, the other bids were the previously-mentioned Hitachi-Zosen Inova AG – Terna SA with their €780 million, and FCC Medioambiente Internacional SLU’s bid of €616 million.
Hitachi’s arguments for appealing the decision were many, with some going beyond the tendering process and looking at the winners’ ability to fulfil the technical requirements at those prices (which it said were too low to be realistic), or even the fact that it had a higher percentage profit figure than Paprec-Bonnici (8% versus 5.9%).
Just two months ago, a branch of the Bonnici Brothers – United Equipment Co Ltd (UNEC) – won another major tender – that for a temporary Delimara power station to help prevent a repeat of last summer’s power cut nightmare.
At just under €37 million, UNEC submitted the cheapest bid and Enemalta confirmed it as the winning bid back in April… but questions were raised as to whether it met the tender criterion for bidders to submit a list of its power plant leasing contracts over the past three years, amounting to a minimum value of €10 million.
What do you make of today’s decision?
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