Plans for a waste-to-energy facility were announced by the government in 2017. The facility was meant to be up and running by 2023. Yet, seven years down the line, the process has not even moved past the contracting stage, with an appeals court striking down the contract award last week. Jacob Borg looks at some of the key questions.

Why do we need the facility?

Malta’s landfills are running out of space.

As Richard Bilocca, CEO of the country’s waste management agency Wasteserv, put it: “This waste-to-energy facility is essential for Malta to move away from the primitive way of managing waste through landfills, which are costly to operate and harmful to the environment.”

The facility will produce a substantial amount of green energy and make a “significant contribution” to the reduction of the Maltese carbon footprint, according to the tender document.

Apart from incinerating waste, Wasteserv says the facility is expected to meet around 4.5% of Malta’s total energy needs.

Where will it be located?

The project is earmarked for a site within Wasteserv’s waste processing facility in Magħtab.

Plans for the project immediately drew protests from surrounding local councils in 2018 over environmental concerns.

An environmental impact assessment hit a snag in 2021 when the environment watchdog ERA had to ask Wasteserv to conduct a new study, as the original one had been called into question over a potential conflict of interest by its authority.

The new assessment had reached similar conclusions about the environmental sustainability of the project.

This paved the way for the Planning Authority to green-light an outline proposal for the construction of the facility in January 2022. 

A case officer told the Planning Authority board that an environmental impact assessment concluded there would be “net environmental benefits” from the project.

Who won the contract?

The €600 million contract was awarded to a French company Paprec working in partnership with local construction firm Bonnici Brothers last October.

The tender envisioned that the design and build phase of the facility would take “approximately” three years.

It is the government that will foot the bill for the construction, while the winning bidder will be responsible for its operation and maintenance over a 20-year period.

The final bidding process yielded what Wasteserv described as three “high-quality compliant bids.

These were Hitachi Zosen Inova AG – Terna SA, FCC Medioambiente Internacional SLU and Paprec.

Paprec submitted the lowest bid – €599 million. Hitachi, whose own bid came in at €781 million, was not happy.

The company, whose legal team included PN MP Adrian Delia, took its grievances to a body known as the Public Contracts Review Board.

The board is the first port of call when appealing a government tender.

What did they attack?

Hitachi 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 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.

The other losing bidder FCC Medioambiente joined the appeal as an interested party, only to later drop out.

The board, chaired by Kenneth Swain with Vincent Micallef and Charles Cassar as members, ruled in February that Hitachi’s claims were not backed by any form of substantive evidence.

“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,” the board said.

Reacting to the decision, Wasteserv’s CEO Richard Bilocca said this “unequivocal verdict shows that WasteServ delivered a gold standard procurement process”.

So why was it annulled?

An appeals court, headed by chief justice Mark Chetcuti, was less impressed by the process.

The court this month found that one member of the committee that evaluated the tender should never have been nominated for the role.

Stephanie Scicluna Laiviera’s nomination to the committee breached public procurement regulations, as she worked as a Wasteserv procurement manager and was also listed as a member of the public contracts review board, the court ruled.

“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 ruled.

As a consequence, a new adjudicating committee will have to be set up to reconsider the bids, the court ruled.

The court also upheld Hitachi’s claims that two members of the public contracts review board who rejected the initial appeal had conflicts of interest, due to their links with public entities.

The judges upheld Hitachi’s claim but made it clear that this did not imply the decision taken by Kenneth Swain or Vincent Micallef was motivated by personal gain or intended to breach principles of good governance.

What happens next?

Wasteserv said it will “analyse” the implications of the court decision to decide the best way forward.

It noted that the court “left it up to Wasteserv” to decide whether to further pursue the current procedure by appointing a new evaluation committee.

Speaking to Times of Malta, Environment Minister Miriam Dalli defended the procurement process led by Wasteserv.

Dalli said the process involved international consultants and auditors who monitored it throughout.

The minister said the government’s main aim is to ensure that its waste management aims are met.

“This is a national project that addresses the needs of the entire country. We are analysing the sentence and will pave the way forward from there,” Dalli said.

Given the three-year construction timeline envisioned in the tender, the project is unlikely to be up and running any time before 2028.