Updated 3pm with Wasteserv statement 

A consortium that lost out on a multi-million contract to build a waste-to-energy facility in Magħtab for Wasteserv has also lost its appeal over the tender decision, with an appeals board ruling against all its claims.

The Public Contracts Review Board turned down all the grounds of appeal brought forward by Hitachi-Zosen Inova AG - Terna SA.

In most cases, the board, chaired by Kenneth Swain with Vincent Micallef and Charles Cassar as members, ruled that the claims were not backed by any form of contradictory evidence.

Wasteserv last year awarded the French waste giants Paprec-Bonnici Bros consortium the contract on the back of a €600 million bid. FCC Medioambiente Internacional SLU made a bid of €616 million while Hitachi-Zosen Inova AG - Terna SA had filed a €780 million offer to build and operate the Ecohive waste management facility.

Wasteserv's planned waste-to-energy facility will be processing 192,000 tonnes of non-recyclable waste per year, which will be incinerated and converted into heat that can generate energy.

WasteServ is also expected to issue two other major tenders on the market, one for an EU-funded organic processing plant and the other for a skip management facility.

All are in line with the state agency's 'Ecohive' plan and are intended to allow Malta to move towards a fully circular economy in the waste management field.

Hitachi-Zosen Inova AG claimed, among other things, that the tendering process was tainted and that the winning bidder could not fulfill the technical requirements at the price it submitted. 

Hitachi-Zosen Inova's claimed that the price quoted by the winning bidder was too low to be realistic. It told the appeals board that the recommended bidder could not sustain such a price with the mandatory technical requirements specified within the tender.

But in its decision, the board ruled that the consortium had not backed up its claims on why it thought that the price was unrealistic.

Moreover, it said that the financial bid of the recommended bidder was more than €50 million (9.2%) more than the Estimated Procurement Value, which was based on market research and had not been challenged by any economic operator.

It also noted that Hitachi-Zosen Inova had a higher percentage profit figure – 8 per cent – against the 5.9 per cent profit margin of the recommended bidder.

“It is incomprehensible to this board how one can come to the conclusion that the bid as submitted by the recommended bidder is to ‘appear’ to be abnormally low,” the board ruled as it threw out this ground of appeal.

Regarding Hitachi-Zosen Inova’s complaints about the evaluation methodology used by the evaluation committee, the board ruled that it had failed to prove that there existed a manifest error of assessment as highlighted in case law.

“Considering the evaluation methodology used, combined with the use of numerous experts, eliminated all subjectivity risks… The board, therefore, finds no legitimate reason to disturb the workings of the evaluation committee,” it ruled.

“From the testimonies heard and documents presented, this board is very serene in stating that the evaluation conducted, and the documents submitted by the recommended bidder, met all the requisite requirements,” it added.

The consortium, represented by lawyers Matthew Paris and Adrian Delia, also raised issues with the composition of the members of the tender’s evaluation committee, complaining that Stephanie Scicluna Laiviera was also on the PCRB and this constituted a clear conflict of interest.

However, the board noted that Scicluna Laiviera was not one of the board members hearing this particular case, so there was no conflict. The board ruled this claim was “unfounded”.

Regarding another possible conflict of interest by another committee member, Charlon Buttigieg, the board ruled that any grievance should have been raised before the third sitting of the appeal.

Hitachi’s lawyers claimed that Buttigieg stands accused before the Gozo Courts on a matter relating to involuntary bodily harm caused to an employee wherein one of the parties of the joint venture comprising the preferred bidder was allegedly also a defendant in a civil case stemming from the same facts in the Italian courts.

The board, however, that no conflict could have tainted the integrity and transparency of the decisions of the evaluation committee.

“At a minimum, the appellant failed to substantiate their claim through concrete evidence. The very fact that there are two judicial processes emanating from the same fact does not in itself and automatically translate into proving the requisite elements giving rise to a conflict of interest,” the board said as it ruled against Hitachi’s last ground of appeal.

In a statement, Wasteserv welcomed the PCRB's "unequivocal endorsement" of its procurement process.

Wasteserv said the appeal process has already set back the project by 122 days. This delay means that 95,500 tonnes of waste have ended up in Malta’s limited-capacity landfills instead of being converted into green energy.

Every additional day of delay increases the risk of losing 150,000 square metres of agricultural land, equivalent to 30 football fields, to a new landfill and worsens Malta’s position in meeting its binding EU obligations, Wasteserv said. 

Hitachi-Zosen Inova AG is a leading global company operating in waste-to-energy and renewable gas projects, and while Terna SA provides construction services and has worked on waste-to-energy projects around the world, it has not yet constructed a waste-to-energy incineration plant.