Refalo’s Agriculture Ministry – Temporary office deal turns into years of direct orders

A supposedly temporary office rental by the Agriculture Ministry has evolved into a years-long arrangement involving repeated direct orders and nearly €800,000 in expenditure, following the government’s failure to complete the refurbishment of its own offices.

An audit by the National Audit Office (NAO) revealed that Anton Refalo’s Ministry committed a series of procurement and planning blunders in its rental of offices at the Pinto Business Centre in Qormi.

What started as a two-year stopgap in 2022 was repeatedly extended through direct orders as the refurbishment of the ministry’s Għammieri offices fell further behind schedule.

The ministry initially rented 800 square metres of office space and 25 parking spaces from United Estates Ltd – owned by the Gatt Baldacchino family –  through a two-year agreement signed in June 2022 for €443,500, excluding VAT.

When the government failed to complete the Għammieri project on time, the ministry extended the private lease for another 162 days, costing taxpayers a further €102,745. That was followed by another one-year extension costing an additoional €234,632.

The three agreements examined by the Auditor General therefore reached almost €781,000, excluding VAT, despite the arrangement initially being justified as a temporary solution.

The breach of rules continued even longer.

In its audit, the NAO revealed that another addendum covering the period from February 2026 onwards was signed but fell outside the audit period, meaning taxpayers are still funding the rented offices four years after the original deal was struck.

All three contracts examined by the NAO – the original lease and the subsequent extensions – were awarded through direct orders rather than competitive procurement.

The ministry obtained approval from the Finance Ministry by invoking urgency provisions under procurement rules. However, the urgency has long ended, and the contracts keep being extended.

To make matters worse, the original direct order and the first extension were never published in the Government Gazette, despite publication being both a procurement requirement and an explicit condition imposed by the Finance Ministry.

The ministry dismissed the failure as an ‘administrative error’, telling auditors it has since established a Central Procurement Unit within the Office of the Permanent Secretary to ensure compliance.

The Auditor General also found shortcomings in the way the deal was planned from the outset.

Despite committing hundreds of thousands of euros in public funds, the ministry carried out no comprehensive needs assessment, formal options appraisal or risk analysis before deciding to rent private premises.

Instead, it relied on a local estate agent to identify three possible properties before selecting the Pinto Business Centre because it was immediately available, provided sufficient space and was the cheapest option presented.

While the NAO acknowledged that the ministry needed additional space following an expansion in its workforce, it concluded that the urgency came at the expense of proper planning.

So far, no one has taken responsibility for the latest blunder at the Ministry.

The Agriculture Ministry is not the only government department leasing parts of the Pinto Business Centre.

At least two other agencies – the examinations department of the Education Ministry and the Energy and Water Agency –  are also renting out sections of the same office building described as a place where ‘luxary meets business’.