The ITS deal mess

Many questions for which the Auditor-General sought answers should have been made by the Opposition in the first place

The report of the National Audit Office (NAO) about the transfer of land – on which the Institute of Tourism Studies stood in St. George’s Bay – to db San Gorg Properties Ltd group makes interesting reading.

I must admit that I did not read the full report that takes up over 200 pages, as I felt the shorter abridged version – also published by the NAO – would be enough. Indeed, it was more than enough!

Among the several issues that are covered by the report, a very interesting one is about who decided that the ITS site was going to be vacated in the first place. Apparently, nobody did! The NAO considers the fact that the decision to relocate having not been ITS-driven, casts doubt on the underlying objective of the relocation and considered this as an encroachment on the responsibilities of the ITS board of governors that ought to have been actively involved in determining the Institute’s strategic direction.

In fact, the first documented reference to government’s decision to relocate the ITS from its site in St Julian’s seems to be in the 2016 Budget, that indicated that a new campus was to be set up in Smart City.

The ‘need’ to relocate the ITS could not be found in key planning documents relating to the tourism industry and to the Institute. Indeed, no reference to the ITS relocation was made in the ITS Strategic Plan 2015-2020 or in the National Tourism Policy 2015-2020 that was issued only months prior to the 2016 Budget.

The ITS Board of Governors and the CEO were only informed of the decision to relocate the Institute after it had already been taken.

There is no justification for the false sense of urgency that drove the government to dispose of the site, despite the lack of alternative premises for the ITS and the lack of a development masterplan for the St George’s Bay area.

The NAO also found inconsistencies in information provided by the OPM and the Ministry of Health and Energy (MEH) as to who was involved in the drafting of the ‘Request for Proposals’ (RfP) document. While the ministry indicated the role of the OPM, the latter negated any input in this regard. The conflicting evidence of the Principal Permanent Secretary OPM and of the Permanent Secretary MEH led to the NAO being unable to determine the parties involved in the drafting of the RfP.

Moreover, the adverts issued by Projects Malta Ltd on the publication of the RfP made no reference to the residential component of the project, but solely indicated an ‘upmarket mixed tourism and leisure project’.

The NAO feels that government could have done more to generate competitive interest in the site and that it could have better ensured a more competitive process. In fact there was only one bid.

The NAO was also given conflicting accounts as to who was involved in the appointment of the members on the evaluation committee. While the former executive chairman of Projects Malta Ltd indicated that he had selected the members of the committee with the PS MEH, the latter referred to the involvement of the Minister MEH. Minister MEH was Konrad Mizzi, of course.

Another issue was that Projects Malta Ltd did not involve the Department of Contracts in any way – an irregular and serious shortcoming considering the amount of money involved. The NAO explains that this casts doubt as to the regularity of the RfP – meaning the RfP was in fact in breach of legal requirements.

The NAO also remarks that no minutes of meetings held by the negotiation committee, whether internal, with the only bidder or with other stakeholders, were kept and the involvement of the Prime Minister, the Deputy Prime Minister, and the Minister within the OPM is unclear.

The only records were those kept by government’s advisors, Deloitte. And NAO ended up relying on third-party documentation for a process that was to be entirely administered by a government entity!

Again, the entity responsible for the administration of public property, then the Government Property Department, was not involved in any significant way in the process, with its role limited to the formalities required by law.

The best line in the report must certainly be this: “Of grave concern to this Office was that the Hon. Dr Konrad Mizzi, the Minister for Tourism at the time of the audit, failed to attend a meeting despite numerous attempts made.”

In an opinion piece of mine published in this newspaper (‘Confusing the issues’, 12 February 2017) I had criticised the way the PN had failed to send a clear message about the issue when the then-Prime Minister Joseph Muscat published the contract of sale of the site at the time, when people were talking about other issues. I had written that I would not be surprised if the Prime Minister “asked Konrad Mizzi to deal with the issue in Parliament to provoke the Opposition to talk about Panama rather than about St George’s Bay.”

I had put it this way: “Instead of concentrating on this one issue and exposed the contract for what it really is – a piece of valuable real estate in Malta being given away for peanuts, probably to fulfil a pre-electoral commitment – the Opposition got lost somewhere between Panama and a brothel in Germany.”

My opinion that the Opposition lost a golden opportunity to uncover the irregular way in which the site was sold is confirmed by the Auditor’s report – although it must be said that it was the then Leader of the Opposition, Simon Busuttil, who had asked the Auditor-General to investigate this suspicious disposal of public property.

Indeed many questions for which the Auditor-General sought answers should have been made by the Opposition in the first place.

Lucky devil

An acquaintance of mine, who is an avid Labour supporter, the other week, told me that Joseph Muscat had all the good luck while his successor, Robert Abela, was unlucky.

Joseph was a lucky devil – although the word he used was not ‘devil’...

Muscat’s term of office was plain sailing leading us to the best of times (l-aqwa żmien) in spite of the corruption and administrative messes that were actually taking place under his guard.

On the other hand, in less than three months since becoming Prime Minister, Abela has had to face the police corruption scandal, yet another serious construction incident, and – to cap it all – the COVID-19 pandemic.

And Robert’s first hundred days are still not over!

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