A court has thrown out the recommendations of a committee to award a €600 million contract for a waste-to-energy facility in Magħtab.

The Court of Appeal found members of the original panel and board had a conflict of interest.

Following an appeal filed by unsuccessful bidder Hitachi, the Court of Appeals ordered on Thursday that a new adjudicating committee be formed to consider the bids.

Members of the Tenders Evaluation Committee and the Public Contracts Revision Board who considered bids for a multi-million contract for a waste-to-energy facility (an incinerator)  had a conflict of interest, the Court of Appeals ruled on Thursday

The appeal was filed by Hitachi-Zosen Inova AG - Terna S.A., which had filed a €780 million offer to build and operate the waste management facility. Lawyers Matthew Paris, Adrian Delia, Luke Dalli Zack Esmail argued that the Tenders Evaluation Committee was irregularly composed and the tendering process was tainted. 

The committee had recommended that Wasteserv award the contract to Paprec-Bonnici Bros consortium on the back of a €600 million bid, but the process was stopped when Hitachi appealed.

Hitachi first appealed before the Public Contracts Revision Board, pleading that there had been a wrong evaluation of its bid, irregularities in procedure, and irregular composition of the evaluation committee.

When the appeal was dismissed, it went before the court, again complaining about the composition of the adjudication committee and also arguing that two members of the revisions board, Kenneth Swain and Vincent Micallef, also had a conflict of interest.  The consortium also complained about irregular procedures by the board.

The appeals court presided by Chief Justice Mark Chetcuti with judges Josette Demicoli and Christian Falzon Scerri, started by considering complaints about conflicts of interest by members of the revisions board.

Hitachi argued that Swain had a conflict of interest since he was a former director of Enemalta, which had a power purchase agreement with Wastserv. Similarly, another board member, Vincent Micallef was a director of ClearFlowPlus plc which like Eastserv and Enemalta, had Malta Government Investments as its shareholder.

The court upheld the pleas, adding that by so doing it was not saying that Swain or Micallef had decided in any manner which gave them personal gain or that they intended to breach good governance norms.

The court declared the decisions of the revision board in this case as being null.

The court also upheld pleas that Stephanie Scicluna Laiviera stood on the Tenders Evaluation Committee in breach of public procurement regulations as she was also on the list of members of the Public Contracts Revision Board and worked as Wasteserv Procurement Manager

"Once Stephanie Scicluna Laiviera was, by law, precluded from sitting on the Tenders Evaluation Committee, the composition of the committee was irregular and, as a consequence, all decisions it took were irregular too," the court declared.

The court said that once it had already declared the committee's composition was irregular, it did not need to consider the alleged conflict of interest of another committee member, Charlon Buttigieg.

The court therefore upheld the appeal by Hitachi and annulled the decisions of the revisions board and the recommendations of the adjudicating committee. It ordered that a new adjudicating committee be formed to consider the bids.