‘Compromised’ incinerator mega tender challenged over ‘irregularities’

The awarding of one of Malta’s largest ever tenders – a €600 million project to install a new waste-to-energy incinerator at Maghtab – has been paused as one of the bidders filed an urgent appeal, claiming gross irregularities by the government.

The Shift previously reported on a mega blunder made by the government through its Department of Contracts when divulging, “by mistake”, sensitive financial information about the bidders while negotiations were ongoing.

However, while the government ignored warnings that it had compromised the procurement process, one of the bidders filed an appeal, claiming gross irregularities, days after the government announced its recommendation to award the tender to Paprec Energies International and Bonnici Brothers.

The latter, known mainly in the construction field, were the only Maltese shareholders among the bidders and are known for their direct connections to Prime Minister Robert Abela.

In an urgent case filed before the Public Contracts Review Board (PCRB), the first stage of a two-step appeals process, Hitachi Zosen Inova AG – Terna S.A. – one of the oldest multinationals specialising in waste-to-energy projects worldwide, asked for the award to be cancelled and re-evaluated due to several claimed irregularities.

One of the prominent bones of contention is the alleged irregularities in the government’s procurement process, as revealed by The Shift in June.

Through its lawyers Matthew Paris and Adrian Delia, the Japanese multinational claimed that the government had “irregularly published the ‘non-binding’ financial offers by some of the bidders” during the ongoing process, “an irregularity, which has the effect of distorting competition and preventing a fair process”.

Additionally, Hitachi also claimed that the recommended bidder, Paprec Energies and Bonnici Brothers, through their submitted price, “cannot sustain such a price with the mandatory technical requirements specified in the tender, or alternatively will sustain the price, by offering a solution not compliant to the tender specifications.”

Hitachi also claimed that its offer was given lower marks than deserved by the evaluation committee to sway the procurement process in favour of the recommended bidders.

How did the blunder progress?

Last June, The Shift reported how, during the lengthy procurement process, the Department of Contracts, administering the tender on behalf of Wasteserv, published the indicative prices of four out of five bidders while negotiations were ongoing.

The publication, described by government sources as “a mistake”, let the cat out of the bag at a crucial time when the bidders were supposed to be competing with the best and final offer, the last stage of the competition.

The Shift reported that despite the contracts department being advised to cancel the process and start afresh, due to this “mistake”, the government went ahead and recommended giving the lucrative tender to Paprec and Bonnci Brothers for €600 million or some €200 million more than the tender’s original valuation.

Following this blunder, two consortia, with indicative prices lower than Paprec/Bonnici, strangely abandoned the bid.

It also resulted that last year, Paprec’s CEO, the lead partner in the recommended bidder, was investigated for corruption in France.

Abela is known to be very close to the Bonnici Group and acted as their lawyer until he became Labour Party leader and prime minister in 2020.

The Shift also revealed how Abela and his wife, Lydia, were also in business with Gilbert Bonnici, the managing director of the Bonnici group.

With another associate of Bonnici, Simon Buhagiar from Zabbar, known as Simon tal-Gass, Abela invested in a property in Iklin, which was pulled down and turned into flats.

The Abelas’ made a significant profit through this business venture with Bonnici and Buhagiar.

According to the rules, a decision will now be taken by the government-appointed Public Contracts Review Board following a hearing.

The board’s decision can also be eventually challenged in front of the Court of Appeal.