The government’s call for proposals for a €100 million ferry service between Malta and Gozo is highly illegal, a company has claimed as it demanded cancellation of the tender.

Virtu Ferries Limited, which runs the catamaran service to Sicily, said the call was “ill-conceived and fraught with a great number of patent, manifest and serious illegalities”.

“Any reasonable board,” it said, “should order its outright cancellation.”

This was the government’s third attempt at awarding the multi-million euro contract for a new ferry service between the two islands. The previous two calls for tenders were cancelled by the Transport Ministry following lengthy legal proceedings.

But whereas the previous two tenders were for the provision of a fast-ferry service between Valletta and Mġarr – which is what Labour had promised in its electoral manifesto – the latest version, issued last month, dropped the term ‘fast’ and included a hop-on, hop-off service from at least five locations.

These include Marsaxlokk, Ta’ Xbiex, St Paul’s Bay, Valletta, St Julian’s and Gozo.

Virtu Ferries last week filed an appeal before the Public Contracts Review Board which has now suspended the tender – worth €115.5 million – again.

The deadline for submissions had already been extended to October following complaints filed by Supreme Travel Ltd and Marsamxetto Steamferry Services, which is owned by Captain Morgan Leisure Ltd and The Mercantile and Coaling Co. Bianchi and Co. Ltd.

They claimed the selection criteria were discriminatory, favouring certain operators and excluding others. They cited the restriction of bidders to companies carrying 850,000 people and to those operating scheduled ferry services in territorial waters for the past 10 years.

Bidders in the dark as to what Transport Malta is expecting

After these matters were cleared and the restrictions withdrawn, the process restarted with an October deadline.

Virtu Ferries have presented a raft of documents to support their claim that the tender is manifestly illegal, in breach of various EU laws, and that it ought to be cancelled altogether.

“Virtu submits that the breaches place the state of Malta in imminent peril of facing action instituted by the European Commission for breach of its Treaty obligations,” the maritime company said in its appeal.

Among others, the tender breached the Concession Contracts Regulations which disallow state aid, the company said

The granting of exclusivity to the chosen operator was not justified, apart from the 15-year term being excessive, it also argued.

Furthermore, the type and frequency of the service to be offered by the concessionaire was not defined in the request for proposals.

Apart from the chosen locations and the size of the vessel, which had to be of between 25 and 35 metres and carry up to 200 passengers, bidders were in the dark as to what Transport Malta was expecting.

And in providing the landing places for the new service, and footing their cost, Transport Malta was effectively assisting in the provision of the service to the detriment of its competitors.

The government’s decision to drop the provision of a fast-ferry service between the two islands has come under fire by Gozitan organisations among others.

They complained that the service as proposed would not benefit the Gozitan community as much as the fast ferry would.

While the fast-ferry service would make it from Mġarr to Valletta in around 35 minutes, the proposed service would take at least 100 minutes.

Aborted fast-ferry tenders

A first attempt at fulfilling Labour’s fast-ferry electoral pledge was made in 2017 when the Transport Ministry asked interested parties to offer a service in conjunction with state-owned ferry company Gozo Channel.

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

Virtu Ferries started talks with Gozo Channel but the Transport Ministry cancelled the request for proposals in January 2018 and issued a slightly modified call.

Following changes to the composition of the evaluation committee, the Gozo Ministry announced that Islands Ferry Network – a joint venture registered just three days before between Magro Brothers and Fortina Investments Ltd, operators of Captain Morgan – had been selected to partner Gozo Channel.

Gozo Channel signed a contract with this company in April 2018.

Virtu Ferries challenged the decision, and after a two-year legal battle, the €20 million contract was nullified.

Gozo Channel was ordered to re-evaluate the bids with a new evaluation board. This was not carried out and instead Transport Malta cancelled the tender for a second time.

Transport Malta reaction

In a reply to the Public Contracts Review Board, Transport Malta said the company raising the objections did not make use of the timeframes stipulated by the law for any clarifications to be requested.

It insisted that the Request for Proposals respects all European laws while maintaining a scheduled ferry service which
is feasible and competitive, with the investment which is set to benefit Maltese and Gozitan people, to

For the first time, the project also imposed eco-vessels that do not harm the environment, with minimal CO2 emissions.  

"While this project will set a future path for public transport, it will adhere to the environmental goals imposed by the government. Additionally, the project is also part of a holistic plan to mitigate the issue of traffic."