Gozo Channel, which has been running at a significant loss for many years, has issued a new €750,000 tender for additional construction work to be carried out at a property it leased from a private party in 2019, despite the state-owned entity having not used it since.

The company has been paying some €63,000 a year in rent to A&J Hili Ta Miema Ltd for the last four years, but the site has not been used, and the ongoing works are unlikely to be finished before 2025.

By then, the state would have paid €350,000 in rent, spent over €1.5 million to demolish and reconstruct part of the building, and wasted half of the 10-year lease contract.

The Shift previously revealed close connections between the chairman of Gozo Channel, Joe Cordina, and the owner of the building, who also used to own Ta’ Miema supermarket in Mġarr, a client of Cordina’s private auditing firm.

Initially, Gozo Channel was supposed to start using the offices in 2020, but shortly after signing the contract, it was discovered the building had severe structural damages and part of it was at risk of collapse.

Instead of returning the building to its owners and cancelling the contract, Gozo Channel decided to demolish half of the building, put in the necessary expensive stabilising structures, and rebuild it at a cost of some €700,000, mainly carried out through direct orders.

Last month, Gozo Channel published a new procurement exercise to carry out more work, particularly installing utility services and undertaking the necessary finishings.

According to the tender, with bids closing in January, the works are estimated to cost a minimum of €730,000 and are to be completed within eight months of signing the contract.

This means that the new offices will not be ready until 2025. If the work is completed on time, more than half of the lease will have elapsed before the site is used for its intended purpose.

Joe Cordina, a former Labour candidate, has been Gozo Channel chairman since 2013.

Once the contract expires in 2029, the company A&J Hili Ta Miema Ltd and its owners, Joseph Hili from Xewkija and his two children, Ruth Hili and Sara Saliba, will get back a newly refurbished property, which could then be leased out again to the Gozo Channel or another third party.

Gozo Channel’s woes

Gozo Channel has been running on a deficit for years despite millions of euro of subsidies paid by the taxpayer. It has failed to publish its audited accounts for at least three years while the government increased its subsidies significantly, reaching some €14 million this year.

The company has also been leasing an old vessel from a Greek company at a cost of some €13,000 a day, on a contract for the past four years through a direct order.

Millions of euro are also distributed to several private companies, providing extra staff to the state entity. Most of the staff are recruited through ministerial ‘recommendations’.