The award of a multi-million-euro contract for a fast-ferry service between Malta and Gozo has been nullified, bringing to an end a two-year legal battle.

In a decision taken on Friday, the Public Contracts Review Board ruled that Gozo Channel Company Limited had breached public procurement rules in awarding the contract to Islands Ferry Network.

It also established that the State-owned company had signed the contract despite knowing that it was facing a challenge over the selection process.

Islands Ferry Network is co-owned by Gozo’s tomato product makers Magro Brothers and the owners of the Fortina Hotel, who operate Captain Morgan Cruises and the harbour ferries. 

Chaired by Anthony Cassar, the review board ordered a fresh evaluation of the bids and a new evaluation committee to be set up by Gozo Channel.

The board reserved criticism for the evaluation committee that awarded the contract, which was chaired by Joseph Cuschieri, now CEO of the Malta Financial Services Authority. It said the committee “did not delve into a satisfactory level of assessment with regard to the technical aspects of the offers”.

Neither did it “attribute the expected importance of the technical aspect and the relative consequences of failing to abide by the maritime regulations”.

The new evaluation committee must have none of the previous members, the board ruled.

Two of those members must have technical knowledge and be well versed in maritime activities and regulations.

Also, the weighting of bids should reflect more prominently the technical compliance aspect.

The saga goes back almost two years to mid-2017, when Gozo Channel issued a call for tenders for a partner to provide a fast-ferry service between the two islands on its behalf.

A first evaluation committee had recommended that Virtu Ferries – which has operated a fast-ferry service between Malta and Sicily for decades – should be awarded the contract.

However, instead of following this recommendation, Gozo Channel issued a new call and set up a new evaluation committee, which then recommended Islands Ferry Network. Gozo Channel signed a contract with this company in April 2018.

Virtu Ferries called the decision “vitiated”, arguing that Islands Ferry had been formed only a few weeks earlier, had little to no experience in this area and did not have the necessary international certification to operate high speed craft.

Virtu instituted a series of legal actions against Gozo Channel which culminated in Friday’s decision by the review board.