MCAST canteen operator owes €600,000 in arrears as audit recommends termination of contract

An internal audit commissioned by MCAST and reviewed by The Shift has found that the private company operating the higher education institution’s canteens has accumulated approximately €600,000 in unpaid dues. However, no action has yet been taken to terminate the concession, despite auditors describing it as a clear breach of contract.

The Shift can reveal that AGV Non Ferrous Malta Ltd, the company operating the canteens through a concession awarded in 2023, has failed to pay hundreds of thousands of euros owed to MCAST, including concession fees, utility bills and other contractual obligations.

The audit recommends that MCAST take drastic action against the operator, including terminating the concession after repeated attempts to recover the outstanding payments failed.

Despite earlier discussions between MCAST’s commercial arm, MG2i Ltd, and the company, including attempts to reach mitigation agreements and payment plans intended to help the operator regularise its position, AGV has continued to default on its obligations.

This prompted MCAST to commission another review, which concluded that the situation had become unsustainable and recommended legal action.

The Shift has confirmed that the relationship between MG2i and AGV started in 2023 when the concession for the operation of MCAST’s canteens was awarded to the company owned by Frank Cachia and his son, Sasha.

According to the audit report, the outstanding amount has continued to increase despite legal letters demanding immediate settlement of the company’s obligations.

The unpaid dues include concession fees payable to MCAST, water and electricity bills, security-related payments and other contractual obligations that the operator was expected to shoulder under the concession agreement.

The Shift is also informed that AGV has failed to honour in full another important contractual obligation requiring it to pay MCAST a percentage of its canteen sales as commission, further increasing the institution’s financial exposure.

Although the audit recommends terminating the concession and initiating court proceedings to recover the outstanding amounts, the board of MG2i, chaired by Principal Stephen Vella, has so far refrained from taking legal action against the company.

It remains unclear why no enforcement measures have yet been initiated despite the scale of the arrears and the repeated breaches identified by the auditors.

Sources said the situation is now expected to take a different direction following the recent government reshuffle, which saw former Education Minister Clifton Grima moved from his portfolio, with Home Affairs Minister Byron Camilleri assuming political responsibility for MCAST.

Cachia, who also serves as president of Marsaxlokk Football Club, is considered close to Grima and has, over recent years, secured a string of lucrative government contracts, particularly from entities falling under the Education Ministry and SportMalta while Grima was politically responsible for those sectors.

Earlier this year, The Shift revealed that companies linked to Cachia had been awarded more than €8.5 million in public contracts over three years, mainly through AGV Non Ferrous Malta Ltd.

Among the largest contracts secured by the company were a multi-million euro agreement with the Gozo Ministry to operate the Gozo Channel ferry canteens and another contract with the Education Ministry for cleaning services at MCAST.

The company was also at the centre of a controversial €18 million Water Services Corporation tender to outsource hundreds of workers. The procurement process was ultimately abandoned by the government without an award after concerns were raised about the evaluation process.

The latest audit findings now raise fresh questions about the due diligence exercised before AGV was entrusted with the operation of MCAST’s catering facilities and why, despite accumulating around €600,000 in unpaid obligations, the concession has not yet been terminated.