WasteServ rebuts Hitachi-Terna appeal on waste-to-energy procurement

WasteServ says procurement process was audited by UK consultants Frith Resource Management and was based on transparency and good governance

Photomontage of the proposed waste-to-energy plant
Photomontage of the proposed waste-to-energy plant

WasteServ has rebutted claims made by tenderer Hitachi Zosen Inova AG-Terna S.A, in an appeal over the awarding of the contract for Malta’s waste-to-energy facility.

The national waste agency said that every aspect of the procurement process was properly adjudicated and above board.

Wasteserv said that UK-based consultancy firm Frith Resource Management had audited the entire procurement procedure from the very first stage right up to the evaluation of the submitted bids.

Wasteserv said Frith had found that “the procurement has been undertaken in a timely, efficient and equitable manner”, confirming the recommendation to award the multimillion project to Paprec Energies International – BBL Malta.

The Paprec Group, which forms part of a consortium that includes Bonnici Group, boasts a revenue of €2.5 billion and employs 13,000 workers across 300 sites, operating in eight countries and managing 32 energy recovery units.

In its appeal, Hitachi Zosen Inova AG-Terna S.A presented four main grounds of appeal: it claimed its technical proposal should have been given a higher score and that the reasons for it not to obtain higher marks are not sufficiently detailed;

It also said the winning bidder’s eligibility was confirmed months ago, when the five participating consortia were shortlisted – but WasteServ maintains that the winning bidder submitted required documentation and fulfilled all eligibility requirements;

Thirdly, WasteServ insists with its evidence proves beyond doubt that the winning bidder’s offer was not “modest” as claimed by the appellant, but slightly higher than the official published €549 million valye that was available and accepted by all bidders throughout the process;

Finally, the appellant argues the procurement should be cancelled should the above elements not lead it to undertake the project at a price tag that is €182 million more expensive than that of the recommended bidder, and 42% above the published budget.

WasteServ insisted that its published information aided transparency, competition and constituteD no irregularity. “In fact the appellant itself, improved its initial offer the most with a reduction of €202 million from the originally quoted €984 million.”

WasteServ also put forward a comprehensive explanation of the evaluation process. “While confirming the scoring given – which was independently audited and confirmed to be correct – it also explains that the appellant’s offer would still not have been ranked first, even if its contention was correct that it should have achieved a marginally higher technical score.”

WasteServ has dubbed its prospective waste-to-energy plant as essential to move the island away from “primitive” landfills that are costly and environmentaly harmful, and secure Malta’s transition to a fully circular economy. 

The agency says that without the new plant, 150,00 square metres of agricultural land – an area equivalent to 30 football pitches – was destined for a new landfill to take in mixed waste, an aim that becomes problematic if the plant is not up and running as planned in the first quarter of 2027.

Bonnici Brothers and French recycling firm Paprec were selected as the preferred bidder on 13 October for Wasteserv’s incinerator project in Magħtab. The project is one of the largest ever public infrastructure contracts to be awarded and the winning consortium was selected after submitting the lowest bid at €600 million.

Wasteserv said that like the recommended bidder, Hitachi-Zosen Inova AG-Terna S.A. submitted a compliant bid. Hitachi's bid came with a price tag of €781,512,463, while Paprec-BBL submitted a bid of €599,659,900.

The appeal process will now be managed by the Public Contracts Review Board.

MaltaToday revealed on Sunday that the Maltese partner in the consortium awarded the multi-million euro Magħtab incinerator tender has ties with 2013 oil scandal kingpin George Farrugia.

Bonnici Brothers Ltd, a Maltese construction firm, is the sole shareholder in an energy company run by Farrugia. The connection has raised eyebrows in industry circles.

The energy company called ENV Energy Solutions was set up in June 2018 and counts as its only shareholder, Bonnici Brothers. According to the description on its website, ENV is engaged in petroleum infrastructure construction, maintenance and services, product distribution and new energy. Farrugia is the company’s CEO.

It is unclear what role Farrugia may have played in the winning consortium’s bid for the Magħtab incinerator tender however, in comments to MaltaToday, Bonnici Brothers CEO Gilbert Bonnici denied Farrugia was involved in any way in the project.

Bonnici also said Farrugia will have no future role to play in the incinerator project if the tender award is confirmed.