One of Malta’s major infrastructure companies, Polidano Brothers, is facing major financial issues after its latest legal action attempting to stop Infrastructure Malta cancelling a €20 million tender it had originally won was struck down.

In an urgent decision the Public Contracts Review Board (PCRB) has turned down an appeal by Polidano – owned by contractor Charles Polidano known as Ic-Caqnu – and upheld the decision by Infrastructure Malta to cancel the award and instead allocate the contract to G&P Borg Limited, despite the latter’s €5 million higher price tag.

According to the PCRB, the fact that Polidano has significant outstanding issues around its failure to pay taxes, including income tax and social security contributions, make the company ineligible for receiving more public contracts.

Following submissions made in the appeal, the PCRB confirmed that the tax authorities did not issue Polidano with a tax compliance certificate, despite an agreement on the payment of millions in tax arrears,  because the company did not respect the terms of the agreement.

This means that Polidano Brothers, which has hundreds of construction employees on its books, will not be able to carry out the procured work on Lascaris Wharf in the Grand Harbour, losing out on a €20 million contract. 

The company is facing a similar decision on another lucrative maritime infrastructure contract, for works in the Marsamxett Harbour. Polidano was awarded this deal worth  €11 million because it was the cheapest bidder. Infrastructure Malta has now refused to sign the contract on the grounds that the company has not resolved its tax issues.

Industry sources told The Shift that while Caqnu’s tax troubles have been brewing for many years, with one administration after another letting the issue slide, the current impasse might mean that Polidano could become insolvent and, as a result, eventually have to fold. 

At the same time the sources acknowledged that the reported €40 million in tax arrears and fines accumulated by Polidano over decades is unsustainable.

A few weeks ago, The Shift reported that Infrastructure Malta had called for Polidano’s appeal to be heard with urgency as the ongoing situation on the two tenders might lead to Malta losing millions of EU funds.

The PCRB’s latest decision can now be challenged by Polidano in court.