A tender for the provision of a fast-ferry service between Malta and Gozo is expected to remain suspended for the coming months after an inexperienced provider was selected to carry out the service.
The Transport Ministry will have to await a decision by the Court of Appeal over the validity of a choice made by Gozo Channel.
The issue, which has been ongoing for the past year, was put in front of the country’s highest court, after the Civil Court this week shed doubts on the way the State company has carried out its exercise.
In a decision which turned down a request by Virtù Ferries to stop Gozo Channel from implementing a contract it had signed with Islands Ferry Network Ltd – a company owned by tomato products producer Magro Brothers and the owners of the Fortina Hotel – the court argued there was no need to freeze the contract’s implementation as the issue was in front of the Court of Appeal.
However, in his sentence, Judge Anthony Ellul drew a number of conclusions which are now expected to be given weight by the Appeals Court.
The judge said the court could not understand how the State company decided to engage Islands Ferry Network Ltd over Virtù Ferries, when according to its call the selected company had to have “the necessary experience, expertise or resources to provide fast ferry services”.
Islands Ferry Network was registered just three days before it was awarded the contract
The court noted that questions were raised over how Gozo Channel made its selection when it resulted that Islands Ferry Network was registered just three days before it was awarded the contract.
"The shareholders of this company, Magro Brothers Investments Ltd and Fortina Investments Ltd, are not known to operate any kind of fast ferry services," the court noted.
The judge also quoted Kurt Gutteridge, one of the evaluators tasked by Gozo Channel, saying that “in its bid, Island Ferries made no reference to any experience”.
The court also observed that while the offer published by Gozo Channel to select a fast-ferry partner closed in February 2018, “the court has difficulty to understand how a company registered in April 2018 could make such an offer to Gozo Channel”.
Virtù Ferries, the other company that took part in the competitive exercise, has opened two court cases asking for a review of the decision made by Gozo Channel and challenging the validity of the decision under the judicial review of administrative action laws which oblige State companies to follow public procurement rules.
Virtù is claiming that the company selected by Gozo Channel should have been disqualified as it didn’t meet the requests made, particularly as it had no experience at all in the sector.
Virtù – which has been operating catamaran services between Malta and Sicily for decades – also said that originally it had been selected to partner Gozo Channel to provide the fast ferry service but its selection was annulled and the process re-started.
The Sunday Times of Malta has reported that in 2017, a Gozo Channel selection committee had evaluated the two companies and presented a report saying that Virtù Ferries was the preferred partner.
However, a few weeks later, the government changed the wording of a tender related to the provision of the fast ferry service prompting Gozo Channel to restart its partner selection exercise and change the members of the selection committee.
In April, Gozo Channel said that the new selection board, chaired by Joseph Cuschieri – the new MFSA CEO and a close collaborator of the Office of the Prime Minster – had found the bid from Island Ferries Network as the most suitable.
Virtù began legal action on all fronts.
On its part, the State company is maintaining that since this was just a process to find a partner, and not a tender process, it was not bound to observe public procurement rules.