Infrastructure Malta has revoked the award of two multimillion-euro tenders to construction giant Polidano over the company’s failure to show it has been given a clean bill of health by the tax department.
Polidano won tenders to carry out €11.8 million worth of construction works to extend the Marsamxett ferry landing, as well as a €19.7 million tender for the upgrading of Lascaris Wharf.
E-mails filed in court proceedings show Polidano hit back at the decision to revoke the tenders, arguing Infrastructure Malta is in possession of legal documents showing Inland Revenue dropped “criminal tax cases” against the company’s directors and the company itself.
The company further argued in a March 7 e-mail that an ongoing civil court dispute between Polidano and Inland Revenue meant it would be “illogical” to ask Inland Revenue for a fresh compliance certificate, the company said.
Polidano contended that Infrastructure Malta was already in possession of tax compliance certificates given to it on previous occasions.
Polidano hit back at the decision to revoke the tenders
The agency held its ground, revoking the award of the two tenders to Polidano on the basis that it failed to submit the tax compliance certificates requested.
According to public procurement rules, companies or individuals with outstanding tax dues should be barred from being awarded government contracts.
An often-exploited loophole exists, however, where a company that has agreed a tax repayment plan with Inland Revenue will still be issued with what is known as a tax compliance certificate.
Times of Malta reported last year how Polidano racked up a staggering €40 million tax bill, with arrears dating back to the 1990s.
Polidano’s attempts to halt the revocation through an injunction, rather than filing a formal appeal before the public contracts review board, were shot down by a court earlier this month.
As a result, the Marsamxett ferry landing tender was cancelled as there were no other viable bids.
The Lascaris Wharf tender was, however, awarded to the next qualifying bidder, GP Borg Group, at a cost of €24.8 million, €5 million higher than the €19.7 million bid by Polidano.
In a contracts review appeal filed yesterday, Polidano said Infrastructure Malta’s decision to award the contract to a rival bidder at an extra cost of €5 million was a “clear sign of maladministration” and indicative of the “unreasonableness” of the agency’s actions.
“We are here dealing with public money,” the company said.
While asking the board to revoke the decision, Polidano also expressed concern about the tribunal’s independence.
The company, through its legal representative, said the board was appointed and paid by the Finance Ministry and its members did not enjoy security of tenure.