Review board declares Gozo-Malta fast ferry deal ineffective

Public Contracts Review Board finds contract between Gozo Channel and Island Ferries was concluded before final decision on an appeal against the tender award

A contract between Gozo Channel and Island Ferries for a fast ferry service has been found to be ineffective by a contracts review board
A contract between Gozo Channel and Island Ferries for a fast ferry service has been found to be ineffective by a contracts review board

The Public Contracts Review Board has decided that a contract awarded by Gozo Channel to Island Ferries for a fast ferry service between Malta and Gozo was ineffective.

In a decision issued on Friday, the PCRB said that the contract agreement had been concluded before a final decision was made by the Board over an appeal filed by Virtu Ferries against the awarding of the contract.

Virtu Ferries, a private catamaran service provider, was the rival bidder to Island Ferries, a joint venture between Magro Brothers and the Fortina Hotel’s owners, to serve as a partner with Gozo Channel to run a ferry service.

Gozo Channel had selected Island Ferries as its partner, but Virtu Ferries cried foul to the PCRB, saying its bid had been by far the cheapest and most technically compliant option, and that Island Ferries’ application had not met the technical and financial criteria required by public procurement rules.

The PCRB, however, had found that Gozo Channel did not necessarily have to abide by public procurement rules when selecting a partner for its fast ferry venture.

Subsequently, Virtu Ferries took the case to the Appeals Court, with the court deciding in March that, as a public entity, Gozo Channel was obliged to follow strict public procurement rules when awarding contracts. It ruled that the PCRB’s decision was null, and asked the Board to reconsider its decision on the validity of the contract.

In its decision today, the PCRB acknowledged that Gozo Channel had entered into a subcontracting agreement with Island Ferries in what amounted to a contractual obligation which had to adhere with public procurement regulations.

Moreover, the PCRB confirmed that Gozo Channel had entered into contractual obligations with Island Ferries on 13 April 2018, well prior to a final decision from the board on the validity of the agreement.

In light of this, the PCRB decided that the agreement between Gozo Channel and Island Ferries was ineffective.

Asked by MaltaToday for a comment on the decision, Virtu Ferries managing director Francis Portelli said that he would rather not comment at this stage since he was still familiarising himself with the decision, but that he felt that things had gone “reasonably well.”

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