- Yorgen Fenech promised €2m success fee
- Winning bidder was practically bankrupt
- Turkish billionaire linked Fenech's fee to bribery
- Bidder claims foul play in contract transfer
- Police ‘file’ on case opened over two years ago
A months-long investigation into the Marsa Junction project has resulted in claims of corruption, deception and a "low" bid to secure the €40 million contract to build its flyovers.
Its unusual nature has also attracted the eye of prosecutors at the European Public Prosecutor’s Office , which is now understood to be investigating the EU-funded project.
Yorgen Fenech, who is under arrest as he awaits trial for journalist Daphne Caruana Galizia’s murder, was promised €2 million in success fees by Turkish construction firm Ayhanlar Yol Asfaltlama, in exchange for using his contacts to help the failing company secure the Marsa tender.
According to the success fee agreement, seen by Times of Malta, Fenech’s role was to act as a “consultant”, introducing Ayhanlar to “key stakeholders”, and seeing their bid through the tendering process.
The way the agreement was structured meant that Fenech would walk away without a penny if Ayhanlar failed to win the contract.
Fenech’s €2 million success fee was to be split between two of his companies: New Energy Supply Limited, a Maltese company used to hold his shares in the Electrogas power station; and Wings Investments, the sister company of Fenech’s 17 Black registered in the United Arab Emirates.
Ayhanlar was formally awarded the contract in July 2018, after an appeal by a consortium of aggrieved Maltese bidders was shot down by the contracts appeals board.
Despite overcoming the initial hurdles, the reality of awarding the project to a financially strained Turkish company undertaking its first major overseas venture – a major logistical challenge - soon hit home for the government.
Ayhanlar’s financial problems caught up with them just weeks later, forcing the company to file for debt restructuring in Turkey.
As a result, works on the government’s flagship infrastructure project ground to a halt.
Three months after the contract was awarded, in October 2018, Fenech warned his Turkish counterparts that the Prime Minister's office, at the time headed by Joseph Muscat and Keith Schembri, was angry at him personally over Ayhanlar’s failure to get the project off the ground.
Fenech promised to quietly handle “politically” the potential fallout of Ayhanlar crashing out of the contract so soon after it was awarded to them by the government.
A decision was taken by the government that in order to save face - and the project - the authorities would sign off on the contract being quietly “reassigned” from Ayhanlar to a company owned by Turkish billionaire Robert Yildirim, despite Yildirim not being in the road construction business.
Public records show how five months after Ayhanlar was officially awarded the contract, Yildirim set up a Maltese company called Shining Star Construction, with the express purpose of taking over the contract.
As the government went into crisis management mode, tensions began to fester between Fenech and Yildirim over the €2 million in success fees the Tumas magnate felt he was owed.
Chats in the hands of police investigators show Yildirim refused to pay the fees, arguing that Fenech’s agreement for the multi-million-euro cut on the Marsa contract was made with Ayhanlar, who had failed to deliver the project.
Copies of the success fee agreement between Fenech and Ayhanlar show that half of the €2 million was going to be routed to Wings Investment, the sister company of 17 Black.
17 Black is the same company that, according to a leaked Panama Papers e-mail, was going to be used to channel payments to Schembri and former energy minister Konrad Mizzi.
At that point in time, Fenech was not publicly known to be the owner of 17 Black.
Sources familiar with the exchanges between Yildirim and Fenech said tensions escalated further when the Tumas magnate threatened to sue Yildirim and Ayhanlar in Malta over their failure to pay the €2 million.
An e-mail sent by Yildirim to Fenech on January 22, 2019 hints at potential foul play in the way Ayhanlar won the Marsa contract.
“We can be in the front pages of newspapers in Malta. Apparently you might like it. What will you tell the court? Bribing someone but no payment. We didn’t say we don’t pay you. We need to renegotiate the all terms and conditions. That’s all! It’s up to you!”, Yildirim said in response to the threat of legal action.
idirim also said in the same e-mail that he would be meeting “Konrad” in Turkey, a reference to Konrad Mizzi, who was in Turkey at the time.
Court records show Fenech did not go through with his threat to sue Ayhanlar and Yildirim.
Apart from the point-blank insinuation of “bribing” made by Yildirim, Fenech also emphasised in other correspondence that the government “fought and argued” with all major contractors “for us”.
‘I cleaned up the shit’
Yildirim strongly denied wrongdoing when contacted by Times of Malta, saying he was not a party to the success fee contract between Fenech and Ayhanlar.
"I would not ruin my billion-dollar name for these small things. I am not Yorgen. I came, I cleaned up the sh*t, and created a state-of-the-art project,” Yildirim said.
The Turkish billionaire said that when Fenech contacted him about the success fees, he replied: “F*ck you Yorgen, I have no contract with you. Your agreement is with Ayhanlar”.
“On what basis [was the success fee agreed]? I don’t know. I was not in it,” Yildirim told Times of Malta.
Questioned about the “bribing” claim in the e-mail he sent to Fenech, Yildirim said he was “testing” the Tumas magnate.
“If Yorgen said, I am bribing someone, I need to give this money…I would walk away, and say I am not going to touch this project because of bribery. He didn’t say [it was bribery], this is why I executed this project. I tested him – is it bribery or not? He never said it is [for] bribing,” Yildirim said.
He further explained:
“He was asking for €2 million. I do not know [if it is] for him, for somebody. I don’t care, you don’t have an agreement with me…
“I did not give one single penny for bribery to anyone in Malta. Including Yorgen. Including the ministry, or Infrastructure Malta, or anyone else. Zero. I am not stupid. I do not need these kind of things. I am a billionaire.” he said.
“F*ck you Yorgen, I have no contract with you.- Robert Yildirim
Yildirim claims he was left with no choice but to step into the contract, as he had previously given his personal assurances to the “transportation minister” that Ayhanlar was a reputable company, capable of finishing the project.
He said he was approached by the minister about Ayhanlar after the company had already won the tender.
“I recommended that Ayhanlar could do the project, and they f*cked it up…I entered the Marsa project clean, and I left clean…I do not play dirty for these peanuts.”
Yildirim said he put up a €4 million performance guarantee on Ayhanlar’s behalf, after the company’s owner admitted that he was facing financial difficulties and asked for his help.
He says the “transportation minister”, at the time Ian Borg, only approached him asking about Ayhanlar’s reputation after the company had already been awarded the contract.
Yildirim said he had no choice but to take over the contract himself after Ayhanlar filed for debt restructuring.
“I asked the government: give me a solution how I can deliver the project in order not to lose my €4 million…They told me: if you make some joint venture or some sort of agreement, Ayhanlar can assign this contract to you. Only to you.”
By virtue of this agreement, Yildirim said he accepted to carry out the contract on Ayhanlar’s behalf, with the government accepting the reassignment.
He further claims that the bid submitted by Ayhanlar was at “a very low price”.
“They [Ayhanlar] were probably desperate to get this project, or I don’t know, they calculated wrong,” Yildirim said.
“I had zero earnings. I was losing [money]. Thank God Infrastructure Malta gave some side roads for us to asphalt, at a very cheap price,” he continued.
Yilidirim said that although this was his company’s first-ever road project, he feels he did an extremely good job and is proud of the outcome.
Documents reviewed by Times of Malta indicate that Fenech and a Turkish fixer who knew both Ayhanlar and Yildirim viewed the Marsa project as an “entry fee” for larger infrastructure projects, like the Smart City ITS campus and Malta – Gozo tunnel.
Yildirim confirmed that he had explored forming part of a consortium to bid on the tunnel project, but the plans never came to fruition.
Ayhanlar: 'we are the victims'
Ayhanlar owner Murat Ayhan has sensationally claimed to Times of Malta that the contract was reassigned to Yildirim behind his back, and attempts to recuperate his money have failed.
He said an Ayhanlar employee, Metin Saribas, who had been given power of attorney to handle the project and sign documents in Malta, had acted without his authorisation.
“Do you know where all the money went? We never saw a penny of it…We are the victims here!” Ayhanlar’s aggrieved owner said during a call with Times of Malta.
Ayhan claims Ayhanlar was frozen out of its Maltese bank accounts, with every thing being transferred to Shining Star.
He said he only found out about these claimed machinations later, as at the time his sole focus was saving the company from its financial troubles in Turkey.
The Ayhanlar owner said his lawyer, Ufuk Demir, and company director Irfan Kahraman had tried to “recover the project” and its associated bank accounts in Malta on two separate occasions, but because Saribas had power of attorney, their attempts were turned down by the bank.
Ayhan said he is suing Saribas in Turkey and also plans to sue Yildirim.
Yildirim however refuted that the transfer took place without Ayhanlar’s consent when contacted by Times of Malta.
He said the duly authorised person in Malta had signed off on the transfer on behalf of Ayhanlar.
“Metin [Sabiras] was in charge of the project from day one. He did the right thing for the company [Ayhanlar] by reassigning the contract,” Yildirim said.
The government never publicly disclosed the reassignment and financial difficulties faced by Ayhanlar.
Saribas did not respond to requests for comment via e-mail and Whatsapp.
Fenech ‘strongly refutes’ bribery claim
Fenech strongly refuted any allegations of bribery when contacted by Times of Malta via his lawyer.
“Mr Fenech has expertise and years of experience in business and commerce, both in Malta and abroad. This is invaluable for foreign companies seeking to set up and run a project in Malta,” his lawyer said.
“That being said, your allegation of bribery is strongly refuted. Given that the allegation seems to have been made by an indignant debtor, it is perhaps suggested that your questions and allegations are directed to him”, Fenech’s lawyer said in reference to Yildirim.
Questions about why the €2 million in success fees were going to be split between a Maltese and offshore company linked to 17 Black were not addressed by the lawyer.
Infrastructure Malta said when contacted that it is not aware of any corruption claims linked to the Marsa project.
A spokesman for the agency said the tender was issued and awarded by the department of contracts for Transport Malta.
“This tender was issued on October 20, 2017 and evaluated prior to the formation of Infrastructure Malta in September 2018.
“The contract and procurement procedure, including the evaluation made by Transport Malta, were subject to the scrutiny of the Public Contracts Review Board.”
The spokesperson said the review board upheld Transport Malta’s decision to award the tender to Ayhanlar, thereby affirming that proper due diligence and procedures were followed.
On the reassignment of the contract from Ayhanlar to Yildirim’s company Shining Star, the spokesperson said this was done upon the request of Ayhanlar.
The contract was duly reassigned with identical rates and terms of the original bid, the spokesperson said.
“[The]” reassignment procedure is a normal and utilised procedure as per applicable regulations under Maltese law,” the spokesperson said.
Asked if the agency was aware the €4 million performance bond had been paid by Yildirim, rather than Ayhanlar, the spokesperson said:
“The performance guarantee in favour of Ayhanlar was issued by a foreign bank. In any case, had the performance guarantee been issued by a third party on behalf of the assigned contractor, it would still have been acceptable, regular and valid.”
Parliamentary secretary Keith Tanti was on the Transport Malta selection committee that chose Ayhanlar as the winning bidder.
Tanti, who was backed by Muscat in the March general election, said when contacted that he had never spoken to Fenech “in his entire life”.
He also said he had never discussed the Marsa project or any of its bidders with OPM officials prior to the tender being awarded to Ayhanlar.
‘Main concern was implementation’ – Ian Borg
Questioned about the tender, Borg told Times of Malta that “some time” after Ayhanlar won the contract, Infrastructure Malta alerted his ministry and the department of contracts that the contractor could be experiencing difficulties in implementing the project.
He said Infrastructure Malta also informed the ministry that Ayhanlar was working to resolve these “difficulties” through the support of another established company already operating in Malta, as per relevant legislation.
“At this point the government's main concern was to ensure that the contractor's difficulties have no impact on the timely implementation of the Marsa Junction Project, given the critical importance of this junction.
“In this regard, Infrastructure Malta introduced Mr Yildirim (representing the company supporting the project contractor to fulfil its contractual obligations) to the ministry during an organised meeting, and both sides made their representations,” Borg said.
Borg said the ministry was assured during this meeting that the project implementation was moving forward as planned, without delays or other difficulties.
“Myself and the ministry informed the rest of the government accordingly with the outcome of the meeting,” Borg said.
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