WasteServ and Hitachi embarked on a battle before the Public Contracts Review Board (PCRB) on Wednesday, in a hearing that lasted more than nine hours.

Hitachi wants the tender process to build an incinerator cancelled and the bids re-evaluated, but WasteServ is insisting the company cannot accept the fact that it lost "fair and square".

The dispute is about a €600 million contract that will see part of Magħtab be converted into a plant that turns waste into energy.

WasteServ awarded the contract to a consortium led by French waste giants Paprec working in partnership with local firm Bonnici Bros.

But after losing out on the multi-million contract, one of the other two bidders – Hitachi Zosen Inova – appealed the decision.

The Public Contracts Review Board began hearing the case on Wednesday.

'Considerable irregularities'

Hitachi is convinced the procurement process was riddled with “considerable irregularities”. 

One of the company’s lawyers – Matthew Paris – argued that although some mistakes could be unintentional, they still jeopardised the company’s potential win.

He said WasteServ adjudicated Hitachi on terms that were not included in the tender document and unjustly accused the bidder of failing to submit documentation that the company had, in fact, provided.

Hitachi also believes it should have scored much higher points for its technical plan.

“We believe our technical solution is detailed enough and totally in accordance with the tender requirements, but the technical score given to us was not adequate,” Paris said.

“We believe the evaluation process was flawed, and if the board decides it was, then we will be requesting a re-evaluation of the bids.”

Hitachi is also convinced it is “practically impossible” for the winning bidder to successfully complete the project with the quoted price.

It is too low, Paris said, so the company will either be offering a sub-standard service or will be unable to sustain that financial plan in the longer term.

'Sometimes one team simply loses'

Appearing on behalf of WasteServ, lawyer Antoine Cremona lashed out at Hitachi, essentially saying it was acting like a sore loser.

“This is like what happens in football. Sometimes, one team simply loses and the other team wins, and very often, the referee has nothing to do with it,” he said.

“Not being the winner is not equal to being cheated. Just because you’ve lost, you can’t say the rules have been misapplied, or even worse, bent. One can lose simply because they happen to have submitted a bid that was €170 million more expensive than the preferred bidder, and this is what happened here.”

Cremona insisted the entire process was meticulous, diligent and methodical, and Hitachi’s claims are unfounded.

This was one of the biggest tenders in Maltese history, he said, and WasteServ not only ran the process through its highly qualified staff but roped in a Danish consultancy company – COWI A/S – to guide it throughout the entire procurement process.

Furthermore, WasteServ also got a second international audit firm – UK-based Frith Resource Management – to conduct a live review of the process. And both COWI’s and Frith’s conclusions matched, he said.

He admitted the process could have had imperfections because it ultimately remains a human endeavour, "but not ones that are significant enough to prove Hitachi’s case, much less to overturn the result in its favour.

“No procurement process is perfect, but perfection is not the benchmark. What Hitachi has to prove is not something less than pure perfection, but that the law was broken and that WasteServ did not live up to the rules, and more importantly, that these mistakes had an actual, real impact on Hitachi’s offer,” he said.

“But there is no legal neck to stand on here. This is a highly speculative, fact-allergic appeal, and the fact that Hitachi could only come up with three or four grievances throughout this highly meticulous process is best proof of how sound the process is.”

All bidders scored very well

All three bidders scored extremely well, as one expects from the high-achievers they all are in the industry, Cremona said, so WasteServ had to finally boil it down to the price difference.

And Hitachi’s price was too high. So high, that even if their bid was re-evaluated and they got full marks on the technical score, they still wouldn’t win the contract, he said.

“I started working on cases like this in 2005, and I cannot recall a procurement process that was so meticulously handled by the contracting authority,” he said.

Hitachi-Zosen Inova had filed a €780 million offer to build and operate the Ecohive waste management facility, and it believes the tendering process was tainted after bidding information was irregularly made public.

It was the highest of the three bids received during the tendering process.

Hitachi originally filed an appeal complaining about three grievances, but during the hearing on Wednesday demanded it adds a fourth grievance after WasteServ’s representatives confirmed that one of the people on the tender’s evaluation board – Stephanie Scicluna Laiviera – is also on the PCRB.

Hitachi’s lawyers argued this constituted a clear conflict of interest.

Both WasteServ and the PCRB argued Scicluna Laiviera was not one of the board members hearing this particular case, so there was no conflict there, but agreed to uphold Hitachi’s request to add the grievance to the appeal process.

Hitachi’s lawyers had earlier also called for the recusal of PCRB chair Kenneth Swain and board member Vincent Micallef. Their request was declined, with Swain saying the board agreed that its members were "fully capable of continuing to hear this appeal in its entirety”.

Another PCRB hearing is scheduled for Friday.

Lawyer Adrian Delia is also representing Hitachi-Zosen Inova.

Lawyers Clement Mifsud Bonnici and Clavin Calleja are also representing WasteServ.

The director for contracts, winning bidder Paprec and the other company that did not win the tender – FCC Medioambiente Internacional SLU – are also being represented in the case.