Business impossible, unless connected

What use is it for Malta enterprise or EU funded joints to promote start-ups when all our budding entrepreneurs realise that the juiciest apples of government works are beyond their reach anyway?

The San Vinċenz €273 million direct order with phantom responsibilities reveals the rotten state of public procurement in Malta, where the connected few get good business while all the others are stifled in a smokescreen of hidden intentions and improvised unwritten rules making it next to impossible to get so much of a crumble of the pie.

This week I got an unusual call from a new acquaintance. He asked for my advice about living and doing business abroad. After a few minutes breaking the ice he told me how he works in the services sector in Malta employing 15 people. He decided to call it quits as doing business with government authorities is becoming impossible, notwithstanding that he can offer good service with a decade-long experience in his sector. His claim is that unless you are paying two main protagonists in government, which he mentioned but which I can’t reproduce without clear evidence, you have no way of having a real shot at government contracts.

As a public servant, in the past I was in charge of spending taxpayer money to buy goods and services on the local market. Like any mayor in our local councils or any director in our civil service, my choices were to follow a strict set of rules to ensure transparency and allow for the widest competition between potential suppliers.

Maltese and European laws in fact foresee that any expense over €5,000 needs first to be published to attract three quotations from different suppliers from which you should choose the most competitive. Any contract over €139,000 needs to be published also for the attention of potential suppliers all across the European Union, through an advert in the Official Journal of the EU and a very popular tenders online portal.

At times, the bureaucracy of the rules can get heavy. The system however protects the public servant from improper influence. More importantly, it allows businesses a level playing field where the good can compete on merit while the new can find a way into the market. Those who bypass this system once might be excused once for reasons of imperative urgency. Those who bypass it systematically are demonstrating disdain to fair competition and good governance.

The San Vinċenz scandal is not the first, nor the last, but is just another one in a series including the Vitals contract, published as a concession instead of a regular public tender, and a myriad of other in a list too long to publish here.

Bypassing the system altogether, with no publication, no quotations and not even as much as a cabinet approval for €273 million shows the rotten state of public procurement in Malta. We reached the state where rather than familiarising themselves with the law, businesses are better off understanding how government entities actually bypass and flaunt the law as they please to respond to some mysterious higher calling. While I admire initiatives such as that by the Malta Chamber of Commerce highlighting the need for ethical business, I cannot blame the businesses which adapt to this dysfunctional setting. For them, this is a matter of survival.

In a country where government buys up to half of whatever services or good you sell, doing business in Malta is becoming impossible unless you are in the ‘in’ list of those that can enjoy the bypass service.

It is politically intolerable to think that you had four ministers and parliamentary secretaries in charge of the San Vinċenz works but none of them has the decency to carry responsibility for the scandal. What’s worse is that the Prime Minister who we should look up to for leadership on such a matter plays the fiddle with them to allow the shifting of responsibilities.

What is Robert Abela waiting to sack all of those responsible for this? Are the 170 pages of the National Audit Report explicitly condemning the way public money was spent not enough for him to act? The Prime Minister’s inaction is not only an outrageous defiance of our expectations as citizens but also a strong slap in the face to the hundreds of Maltese entrepreneurs trying to ply their trade in the procurement market.

While all around us countries are presenting national recovery plans to come out of the pandemic downturn by putting private enterprise and fair competition as the main drivers of a renewed economic growth, here in Malta we nip entrepreneurial spirit in the bud through regular news of ‘would be public’ contracts handed to the connected bypassing all applicable rules.

What use is it for Malta enterprise or EU funded joints to promote start-ups when all our budding entrepreneurs realise that the juiciest apples of government works are beyond their reach anyway?