Privatisation: Need for a regulatory framework

The US interest in the Alterra consortium which lost the bidding game in the privatisation process of the Malta International Airport is a blessing in disguise.

As a Maltese and above all, a lawyer, I always wondered whether there is any law or regulation that applies to the vetting of the privatisation process and I have already had occasion to voice my concern on the matter. But my voice is a cry in the wilderness and I am hoping that through the United States and the Alterra consortium, the lack of transparency in the privatisation process will be seriously challenged.

Apparently, these concerns are not only my own because the European Union, in the acquis, has already informed the government that it is not happy with the tendering procedure adopted by Malta. Apparently, the goverment will comply with EU regulations when practically the bulk of privatisation is concluded.

The Public Service (Procurement) Regulations, 1996 are supposed to outline the procedure for the award of tenders. They lay down that the director of contracts has to publish all the results, that there has to be a procedure for the submission of complaints, and for such complaints to be dealt with at public hearings.

However, in the privatisation process the role of the director of contracts has been reduced to a mere depositary of the tenders to the extent that in beefy contracts he is in most cases not involved.

In effect, when I enquired with the department of contracts as to the regulations applicable in the privatisation process, the answer was that the public service (procurement) regulations 1996 did not apply.

So now we have a situation where:

a. The tenderers who are not shortlisted are not given a reason for this decision on the pretext that the procedure is not finalised;

b. The result leading to the shortlisting is not published;

c. There are no regulations on the procedure for appeal as in the case of the financial regulations of 1996;

d. The director of contracts has no say in the privatisation process;

e. Sweeping statements such as that the government is not bound to accept the best of any other proposals and shall not be bound to give reason for rejection of any or all proposals are more reminiscent of a totalitarian state than of a country which is aspiring to become a member of the European Union;

f. Our civil code provides means of redress for the aggrieved party within six months from the decision. However, in the case of those who are not shortlisted, nobody knows whether the six months start running from the date of the final decision or from the date that they learn that they have not been shortlisted. Moreover, the action for redress does not stop the privatisation process.

I have no vested interest in the privatisation of MIA. I have also had occasions to criticise the legality of the decisions of the adjudicating committee in the case of the integrated solid waste management project.

My interest lies solely in establishing a regulatory framework that ensures transparency in the privatisation process before the bulk of privatisation is concluded.

After all, public assets are at stake.