'Fairmount tender bore no resemblance to real costs'

Malta Shipyards were so intent on winning the contract for unusual work on the Fairmount Fjord that they drastically reduced their asking price.

A senior official said that the three management executives running the tendering process were "making a big mess, the prices have no bearing on actual costs, but the client is interested".

This was said yesterday by Labour MP Alfred Sant during a meeting of the House Public Accounts Committee, while he was questioning senior representatives of PriceWaterhouseCooper about the disastrous loss-making contract.

He asked what dialogue there was during the whole process between management and board. Estimated costs had been grossly reduced by the time the contract had been signed.

PriceWaterhouseCooper said that even after the final figure had been reduced from €25 million to €20 million, the estimated profit had been left untouched at just over €4 million. The shipyards' management was aware that it was a complicated and unusual project.

Another point that came out of the meeting was that when the shipyards had asked the Finance Ministry for a subvention of €4 million to carry on with the contract, the Permanent Secretariat had approved the request without going into any details of why the subvention had become necessary.

A full report will be carried tomorrow.