Transport Malta renews direct order but remains evasive over contractual obligations

Transport Malta renews concession for floating dock issued without call for tenders or expressions of interest as Melita Marina group say their investment runs into millions, employing over 100 workers

Melita Marine was bound by a series of long-term conditions, including a €4 million investment in infrastructure, equipment and upgrading of the area, the employment of 10 new employees in the first year and the engagement of four apprecentices for three consecutive years
Melita Marine was bound by a series of long-term conditions, including a €4 million investment in infrastructure, equipment and upgrading of the area, the employment of 10 new employees in the first year and the engagement of four apprecentices for three consecutive years

Transport Malta has renewed the concession for a floating dock in the Grand Harbour which was issued without a call for tenders or expressions of interest in 2014.

However, while claiming that the conditions set in the initial 12-month concession have been met, the authority and operator Melita Marine both failed to provide proof of this.

In April 2014, TM awarded the 12-month contract to entrepreneur Pierre Balzan’s company, set up a month before.

Melita Marine was bound by a series of long-term conditions, including a €4 million investment in infrastructure, equipment and upgrading of the area, the employment of 10 new employees in the first year and the engagement of four apprentices for three consecutive years.

TM chairman James Piscopo had told MaltaToday that Melita Marine was directly awarded the permit “because this was an immediate, realisable opportunity that ought not to be missed” and claimed the operation was expected to generate a turnover in the region of €10 million annually.

Piscopo had said that Melita Marine would be using the Outer Coal Wharf for the berthing and operation of a floating dock and for the provision of repair services on superyachts and marine vessels.

Asked whether these conditions have been met, Pierre Balzan said “the agreement entered into with the competent authorities has been, and is being, achieved in full. The company’s accounts and taxes are paid annually, as well as the number of Maltese workforce employed and growing, coupled with its past projects and order book for 2016 and 2017 clearly demonstrates its ongoing success.”

Yet, Balzan did not confirm whether the company has achieved its turnover targets, invested €4 million in infrastructure and employed 10 new people, instead saying “for commercial reasons, some of the questions asked are considered to be commercially sensitive.”

In all, the company employs over 100 workers and has made “substantial investments and turnover”.

“This can be verified by accessing our audited accounts at the MFSA,” a spokesperson for the Melita Marine Group later said. “The group now employs over 100 workers, whilst we have also invested millions in a floating docking capable of lifting up to 5,000 tonnes.”

On its part, TM told MaltaToday that the last routine check to verify that Melita Marine are fulfilling their contractual obligations was carried out in April. 

“The authority found no valid reason to stop the company from continuing its investment to the detriment of the industry and its workers.”

Pre-empting the company’s response, TM added “kindly refer commercially sensitive questions to Melita shipyards themselves.”

TM also failed to clarify when and for how long the concession was renewed.

The controversial decision to award the concession to Melita Marine irked a number of companies which would have submitted a bid had the authority issued a public call and is the subject of a judicial protest filed by a private company against Piscopo.

Soon after Melita Marine was awarded the direct order, Woman In Management Ltd filed a judicial protest demanding that the concession be repealed since it was in breach of competition laws as determined by the European Court of Justice.

Woman In Management Ltd, directed by Alexia King and Tracy Vella, was interested in teaming up with a foreign company had Transport Malta issued a call for tenders.

In its judicial protest, the company explained that it only got to know about the concession after MaltaToday revealed details of the direct order on 13 April, 2014.

The company’s lawyers said that the company could have possibly shown interest in the regulator’s contract, but that this was not published and therefore prevented them from competing for it.

In 2011, Transport Malta had issued a tender for a concession agreement for a floating dock at the Outer Coal Wharf in Kordin, where Balzan’s Melita Shipyard Ltd now operates.

The contract was awarded to Palm Shipping, however the floating dock was later operated by Cassar Ship Repairs after the venture was not successful.

This is not the first direct order for the concession of quays in the Grand Harbour issued by the authority.

In May 2014, TM had awarded a direct order to Ablecare Oilfield Services Holdings for the use of the former shipbuilding site in Marsa before the company was named as the preferred bidder for the development of a maritime hub in January 2015.

Earlier this month, MaltaToday reported that Boiler Wharf in Senglea was also awarded by direct order to a private company.

Denying that the concession was given by direct order, Piscopo claimed that the authority “acted responsibly in allocating an existing operator, with ongoing operations, with temporary six month berthing agreement after the same operator had to be moved from its place of operations due to the privatisation of the Maritime Hub.”

Echoing Piscopo’s statement, the company, Polaris Marine Limited, said that the concession was not given by direct order but by “a short-term agreement entered into between Transport Malta and Polaris Marine Services Co. Limited.”