Updated 2pm with Transport Ministry explanation below -

The request for proposals for a ferry service between Malta and Gozo is perfectly legal and offers a fair and level playing field for prospective bidders, a company interested in the contract has insisted.

Marsamxetto Steamferry Services Ltd rebutted the claim made by rival company Virtu Ferries Limited, which runs the catamaran service to Sicily, that the call was “ill-conceived and fraught with a great number of patent, manifest and serious illegalities”.

Virtu demanded the cancellation of the tender which is the government’s third attempt at awarding the multi-million euro contract for a new ferry service between the two islands.

The previous two calls for tenders were cancelled by the Transport Ministry following lengthy legal proceedings.

Whereas the previous two tenders were for the provision of a fast-ferry service between Valletta and MÄ¡arr – which is what Labour had promised in its electoral manifesto – the latest version, issued last month, dropped the term ‘fast’ and included a hop-on, hop-off service.

Virtu said the request for proposals breached the European cabotage regulations and the Concession Contracts Regulations which disallow state aid. It also argued that the granting of exclusivity to the chosen operator was not justified, apart from the 15-year term being excessive.

No maritime service would be profitable without government intervention

In its rebuttal before the Public Contracts Review Tribunal, Marsamxetto, which operates the ferry between Valletta and Sliema and the Three Cities, insisted a public procurement procedure cannot and should not be cancelled on the mere suspicion that a contract may eventually give rise to state aid unless it is already very clear that this will be the case.

The company, which is co-owned by Captain Morgan Cruises and The Mercantile Shipping and Coaling Co. Bianchi and Co Limited, accused Virtu of going on a “fishing expedition” and of trying to safeguard its own maritime dominance.

It said the particular circumstances of the Maltese islands justified the call, notwithstanding the exclusivity that would be granted to the eventual bidder, which was also justified because there was a real public service need.

Marsamxetto said that no maritime service between, say, Marsaxlokk and Valletta or Gozo and Valletta, would be profitable without government intervention and without the granting of a degree of exclusivity.

The request for proposals was a step in the right direction towards the provision of quick, eco-friendly ferry transport service in the public interest.

“This is an internal call for proposals which may attract foreign operators,” the company said.

“In Marsamxetto’s view, it has been issued in a transparent and professional manner which is why it will be submitting an offer. It makes and allows for a competitive process which enables bidders with experience in ferry operations and sea transport service to compete on a level playing field within clearly defined parameters while being given the space to propose innovative and effective solutions that will ultimately benefit commuters.”

It requested the tribunal to turn down Virtu’s pre-contractual complaint and proceed with the request for proposals.

Ministry: new service will be a fast ferry

Meanwhile, the Transport Ministry in a statement said the government has not discarded the fast ferry pledge as proposed and a call is currently open for more extensive service.

"The change in policy in this regard was to issue a commercial call instead of one integrated with the public service obligations as operated by the Gozo Channel," the ministry explained. 

It noted the replies by Transport Malta before the Public Contracts Review Board (PCRB), with regard to the call for ferry services (that can support fast operating speeds) issued by the same authority in August.

"As communicated several times, following research by respected experts, Transport Malta made the decision to issue a call where bidders are invited to submit and develop a schedule with times and routes that must include six mandatory places. The ultimate goal is for our country to have a quick and clean ferry service connecting these places, which include Gozo, Marsaxlokk, Ta’ Xbiex, St Paul’s Bay, St Julian’s, and Valletta.

"Transport Malta is allowing bidders the freedom to develop these routes themselves, and these can therefore be direct between these different destinations or else including stops. The schedules and routes can also include both formats, direct and indirect."

The ministry noted that through the submissions made by Transport Malta, the authority is insisting that the call should continue and not be stopped 'so that the people can begin benefitting from these new connections'.

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