Still in the pipeline: concessions agency to oversee Palumbo deal

No government unit was ever made responsible for overseeing the contractual obligations of the Palumbo shipyards when the 30-year concession for the operation of the dockyard was issued in 2010.

And although the Maltese government’s investments arm Mimcol had been asked to conduct a compliance review in 2019, no confirmation was given whether a written report has ever been presented to government.

In reply to questions from MaltaToday, a spokesperson for the minister for the economy has restated the commitment made by the government in the last Budget to establish an ad hoc unit to review all public concession agreements and ensure conditions set out in such agreements are honoured.

The commitment was restated in a reply to questions on the concession agreement to Palumbo, which obliges the government to certify – annually – that such contractual obligations and commitments are being “properly fulfilled and maintained” and undertake “written condition reports every two years”.

According to the agreement, the review should address contractual obligations such as whether the docks have been effectively operational with full financial investment, and to certify environmental compliance to professional standards throughout the duration of the agreement.

But the ministry for the economy has revealed that when the concession was issued in 2010, the administration at the time did not specify who was to carry out the review in the concession agreement.

Nevertheless, Mimcol was entrusted “on two different occasions to carry out two compliance reviews on the Palumbo concession, with the latest one dating back to 2019”, the spokesperson said.

The government failed to specify when the first review was conducted, despite follow-up questions sent by MaltaToday.

The ministry also failed to reply to a question on whether a written report has been presented to the government as specified in the concession agreement, and whether the review “entrusted” to Mimcol in 2019 had been concluded, or whether a “written condition report” was presented to government.

And there was no reply either as to any notice of any material breaches had ever been served or if breaches were remedied within 90 days.

MaltaToday is informed that such issues were raised in meetings between Mimcol and the residents’ group Kottonera f’Qalbna, which is demanding full transparency on the implementation of the concession agreement especially in view of the change in the ownership of the yard.

MSC Cruises SA recently purchased 50% of Palumbo Shipyards Limited, who currently operates the shipyards in Bormla on a 30-year concession by the government.