The National Audit Office just confirmed what we all suspected. Ian Borg’s Transport Malta (TM) was the wild west. It broke every rule and regulation of public procurement in the most flagrant and shocking way possible.
Millions of taxpayers’ money were siphoned off in direct contracts and direct orders doled out to hand-picked companies. No competition was possible. The TM chairman handled tens of thousands of euros of self-procurement himself; “an unconventional route,” according to the NAO.
Transport Malta under Borg was a law unto itself. It completely bypassed the Ministry for Finance and Employment and the Department of Contracts. It paid contractors hundreds of thousands of euros more than they were originally contracted for.
TM claimed it had to issue direct contracts and direct orders because of the urgency of the work. But that work included consultancy work and survey costs. “The NAO could not understand the nature of urgency,” the report stated.
Borg’s TM was so completely out of control that direct contracts and direct orders in one year alone amounted to €23.2 million.
TM’s total spend that year was €26.8 million. Eighty-six per cent of all of TM’s expenditure was in direct contracts or orders, which should only be issued in exceptional urgent circumstances. At Transport Malta, they were the rule. TM only issued €2.7 million worth through tenders.
The Public Procurement Regulations (PPR) allow a contracting authority to issue direct contracts for a value not exceeding €10,000. But TM issued direct contracts exceeding €1 million. It failed to seek authorisation of the Ministry for Finance and Employment and direct contracts were approved solely by TM’s Procurement Committee.
The NAO couldn’t believe its eyes. But Borg couldn’t care less. When the NAO raised its concerns and queried how direct contracts costing millions could simply be approved by Transport Malta, TM didn’t even bother to answer. “Queries raised by NAO… remained unanswered,” the report said.
TM’s senior management tried to find every excuse to fob off the NAO. Everything was so urgent, they claimed that they simply had to pick their favourite company or make that Borg’s favourite company.
In October 2021, TM launched the Malta Metro Network Exhibition which lasted just one fortnight. TM spent over €548,000. One single supplier was paid €503,851. That supplier was TEC Ltd, coincidentally the supplier of all of Labour’s mass events. Coincidentally, that same company provided Borg with tents, chairs, tables, lights, video wall screens and other services for at least six massive events held in Dingli, Mġarr, Siġġiewi, Rabat, Qormi and Żebbuġ as part of his electoral campaign.
Borg and TM were so determined to give TEC Ltd those hundreds of thousands of euros that they sought a quotation from TEC Ltd alone. TM’s excuse for not obtaining quotations from other suppliers was “confidentiality purposes”. What did they need to keep confidential? A fictitious metro? Or maybe the obscene amount of taxpayers’ money they were pumping into Labour’s main supplier?
TEC Ltd’s quotation for the Malta Metro Exhibition was for €474,077. The agreed maximum spend for the whole exhibition was for €400,000. Despite the cap, TM’s procurement committee approved 20 separate payments to TEC Ltd amounting to €503,851. Other suppliers were paid an additional €44,331. That’s an overspend of €148,000 on an exhibition of a fantasy metro.
If institutions were really working, TM, its chairman and Ian Borg would be under investigation- Kevin Cassar
And the purchase orders were raised after the date of the relative invoices. That’s like getting billed for something you haven’t even yet decided to purchase.
There was far worse. Instead of employing its own clerks, TM paid almost €3 million to two service providers through direct contracts for clerical services. TM was breaking public procurement regulations again by issuing such massive direct contracts. Instead of entering into one contract with the service providers, TM signed a contract for each subcontracted clerk, breaking those €2.97 million into multiple smaller contracts.
When those clerks were on vacation leave or sick leave, the service providers didn’t provide any replacement. TM was paying for nothing, out of our taxes.
In May 2021, the government launched a nationwide initiative for a major clean-up of roads and beaches. TM sought clearance from the Ministry for Finance and Employment to issue a direct order of €10,000 to each of its main suppliers. But TM requested permission from the Department of Contracts to award eight suppliers a direct order of €150,000 each. When the Department of Contracts realised this would cost €1.2 million, it didn’t approve the procurement.
Even the Department of Contracts realised this was a case of “bad planning”. But despite the Department of Contract’s lack of approval, TM still went ahead, awarding four suppliers a total of €57,820. When the NAO queried how a job that had been estimated to cost 1.2 million had been completed with €57,820, Transport Malta didn’t even reply – “no clarification was forthcoming”.
When TM issued a public call for quotations to upgrade a slipway in St Paul’s Bay, the contractor submitting the cheapest bid of €589,321 was selected. But when TM issued the contract, it raised the value to €800,000. That contractor was paid €898,562 in just one year. That same contractor was obliged to provide an €80,000 performance guarantee but he only provided €24,000.
TM claimed this massive miscalculation “could have been an oversight”. But there were more oversights in favour of that same contractor.
He was paid €69,384 in six separate payments for trenching ducts for electric cables for GoTo charging modules, even though there was no contract to cover this service.
This was not just incompetence. This was no oversight. This is shockingly flagrant abuse. We know what would happen if institutions were really working. TM, its chairman and Borg would be under investigation. Instead, Borg is promoted to foreign minister.
Kevin Cassar is a professor of surgery.