Chris Cardona. Photo: Matthew Mirabelli

Economy Minister Chris Cardona personally intervened to change the results of a Privatisation Unit tender award, an investigation by The Sunday Times of Malta reveals. The move was followed by the resignation of Privatisation Unit chairman Emanuel Ellul, although the latter is insisting he stepped down for health reasons.

The incident concerns a tender document issued last April for the provision of legal services to assist the unit in the pre-drafting, adjudication, negotiations and final agreements of an expression of interest for the granting of two new casino licences.

In May the Privatisation Unit finalised a report on the adjudication of the tender.

Following the opening of the sealed tenders and the ranking of the 14 bids received by an adjudication committee – comprising representatives of the Privatisation Unit, the Lotteries and Gaming Authority, Mimcol and the ministry – the unit passed on the report to the minister for approval.

However, Dr Cardona objected to the way the committee carried out its adjudication and ordered the award of the tender to another firm after re-ranking some of the submitted bids.

When asked by The Sunday Times of Malta whether Dr Cardona had overruled the Privatisation Unit and whether his resignation, which came in the same week as the final award of the tender, was a reaction to the minister’s interference, Mr Ellul said:

I am not supposed to talk about these things

“I am not supposed to talk about these things with the press as these are confidential matters and I am bound by professional secrecy.

“However, with regard my resignation I have already stated publicly that this was for personal health reasons.”

Asked by this newspaper to confirm or deny whether Dr Cardona had intervened to change the results of this tender, a spokesman for the minister said: “This issue is being handled by Parliamentary Secretary Edward Zammit Lewis.”

Documents seen by The Sunday Times of Malta show that according to the official Privatisation Unit report, the tender was originally won by Filletti and Filletti Advocates – a Valletta-based law firm – which also submitted the least expensive bid. Law firms Dingli and Dingli and GVTH came in second and third place respectively.

However, after Dr Cardona’s intervention, the Permanent Secretary at the ministry asked to re-open the bids and ranked them in a different order, placing Deguara Farrugia Advocates in first position and downgrading the original winner Filletti and Filletti to third place after Chetcuti Cauchi Advocates.

Government sources told this newspaper that the chairman of the Privatisation Unit objected formally to Dr Cardona’s direct intervention during a “heated” private meeting held at the ministry.

The sources added that Mr Ellul – a former Central Bank Governor appointed by then Prime Minister Alfred Sant during the 1996-98 legislature – also objected in writing, stating that any adjudication process different to the one used by his unit risked adulterating the process with subjectivity.

Despite these objections, the Permanent Secretary at the ministry, acting on Dr Cardona’s orders, instructed the Privatisation Unit on May 9 to sign a letter of engagement with Deguara Farrugia Advocates.

Mr Ellul tendered his resignation from the Privatisation Unit on May 13 – the same week in which the tender was awarded to the law firm chosen by Dr Cardona’s ministry.

Although Dr Cardona has not replied to questions sent by The Sunday Times of Malta, various parliamentary questions on the issue were submitted recently by Nationalist MP Francis Zammit Dimech.

The former minister had asked Dr Cardona to state whether he had intervened to change the results of the tender.

In a reply last month, Dr Cardona denied intervening in the process, though he said he had a right as a minister to follow the work of all the entities that fall under his remit.

MINISTRY REACTS TODAY

In a reaction  today, the Economy Ministry said the Privatisation Unit that that what it had issued was a call for proposals, not for tenders. 

The Privatisation Union considered the proposals and advised the ministry solely on the basis of price. The ministry said this was only advice, and the choice should not be based solely on price, but quality criteria. 

Under the former government, the ministry said, such services were contracted by direct order.

The ministry denied there was any dispute between it and Mr Ellul.

PN REACTION

The Nationalist Party said the ministry statement confirmed that the minister had intervened and changed the result. It was telling, it said, that for the ministry, the recommendations of the Privatisation Unit were only considered as being advice and the minister felt free to make his choice on the basis of qualitative criteria.