A consortium that lost out on a multi-million contract to build a waste-to-energy facility in Magħtab for Wasteserv has appealed the tender decision.
Hitachi-Zosen Inova AG - Terna S.A., which had filed a €780 million offer to build and operate the Ecohive waste management facility, believes the tendering process was tainted after bidding information was irregularly made public.
The company also believes that the winning bidder - a consortium led by French waste giants Paprec working in partnership with local firm Bonnici Bros - cannot fulfil the technical requirements at the price it submitted.
Wasteserv awarded the Paprec-Bonnici Bros consortium the contract on the back of a €600 million bid.
Hitachi-Zosen Inova's bid was the highest of three received during the tendering process, with a €616 million bid filed by FCC Medioambiente Internacional SLU falling in between the two.
In a filing with the Public Contracts Review Board dated October 23, lawyers for the consortium asked the board to cancel the entire tendering procedure and refund a €50,000 fee it paid to take part in the process.
Hitachi-Zosen Inova's appeal is focused on three key points:
- Wrong evaluation
The consortium believes the evaluation committee incorrectly scored its bid on technical grounds and mistakenly stated that some information had not been provided when it was in fact made available.
It also took issue with the committee's failure to flag these issues with it prior to issuing a score for its bid.
2. Price too low for technical requirements
Hitachi-Zosen Inova argues that the winning bidder's annual fixed cost of €8 million and capital cost of €285 million is too low to be realistic.
"The recommended bidder cannot sustain such a price with the mandatory technical requirements specified within the tender, alternatively it will sustain the price, but by offering a solution not compliant to the tender specifications," it argued.
It also took issue with the evaluation committee relying on various sub-contractors to assess technical aspects of the bid, saying these sub-contractors had to show documentation for their work and assume liability for the contract.
3. Irregularities in tendering procedure
Hitachi-Zosen Inova believes the entire procedure should be cancelled, because Wasteserv and the Department of Contracts had published non-binding financial offers made by four out of five bidders prematurely.
That decision had distorted the competitive tender procedure and prevented fair competition, Hitachi-Zosen Inova argued.
What happens next?
Hitachi-Zosen Inova's appeal effectively slams the brakes on the major infrastructural contract, intended to revolutionise Malta's decades-long focus on dumping waste into landfills.
The Public Contracts Review Board must now assess the Hitachi Zosen appeal and decide whether or not to accept the consortium's requests and legal arguments.
Wasteserv and the Department of Contracts have 10 days to file their responses to the appeal.
The appealing consortium, which is being represented by lawyers Matthew Paris and Adrian Delia, said it has further evidence to present and that it wants various witnesses, including representatives of the evaluation committee, department of contracts and all bidders, to testify.
The PCRB must decide on the appeal within six weeks from the day when it heard oral submissions - though the law also allows the PCRB to postpone that decision to an undefined "later period".
The three-person PCRB is chaired by Kenneth Swain.
Should either party feel aggrieved by the PCRB's decision, it can then take that grievance to the law courts and file a case in the court of appeal. That case must begin within two months of it being filed.
What is the incinerator intended for?
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.
By the time work starts on-site, WasteServ also expects to have 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.