Two contractors have been ordered to pay around €100,000 in damages and fees between them after they refused to carry out roadworks despite being the winning bidders. 

In two separate judgments handed down this week, the court ordered the contractors to pay damages to roadworks agency Infrastructure Malta after they refused to carry out excavation and laying work.

The works were meant to cover mostly countryside lanes, including part of the Victoria Lines, in Naxxar and other quiet roads in Dingli, Siġġiewi and St Paul’s Bay that were delayed for months. 

The two judgments are being described as “landmarks” in legal circles as they may have an impact on the way public contracts are handed out in the future.

In particular, the judgments lay out that, although no contracts had been signed, pre-contractual agreements, such as a bidding process, are to be respected.

'Bitumen needed was double'

The first tender, issued in 2019, was for the resurfacing of several rural roads and won by Restoration and Construction Services Group Limited.

The court heard that, despite entering into a pre-contractual agreement, the contractor had allegedly not acted in good faith.

Instead of proceeding to sign a contract and begin works, the company pulled out.

The government agency says it then had to go for the second-best offer, which cost some €27,000 more than the winning bid. 

Infrastructure Malta called on the court to order the bidder to fork out the difference in the form of damages. 

The agency also said this had cost it time and money and even claimed it had jeopardised EU funding, which needed to be spent within a specific timeframe. 

The contractor argued that they had been the victim of “restraints of trade” caused by the suppliers of a substance known as bitumen, a black tar-like substance that is often referred to as asphalt.

They argued that the volume of material needed was more than double that estimated in the original call for bids.

Furthermore, the contractor raised concerns on the way the works were to be carried out, describing them as “irregular”. 

Despite these concerns, the court, presided by Mr Justice Neville Camilleri, declared the contractor must pay the full amount of €27,183 in damages and that it should cover the expenses incurred by the roadworks agency. 

Italian contractor to pay €68,000

In a second judgment this week, a court ordered Italian contractors Appalitalia Srl Unipersonale to also pay damages.

Infrastructure Malta told the court that the contractor had similarly pulled out of the job after being selected as the winning bidder. 

The contractor said the volume of material needed to carry out the upgrade to the rural roads was significantly larger than anticipated. 

Mr Justice Grazio Mercieca ruled the company must pay €68,033 in damages, the difference between its bid and the second-best offer received. 

Infrastructure Malta was represented by in-house counsel Rachel Powell.