The direct negotiation with one company without a prior call for competition for works on the Coast Road was a “serious failure” to comply with public procurement rules, the European Court of Auditors (ECA) has concluded.

Transport Malta said, however, that two public calls were made for the Coast Road.

In its annual report, the ECA noted that in the case of the Coast Road, a motorway section of a TEN-T road network, the contracting authority negotiated directly a contract with one company without a prior call for competition.

“This is not in line with EU and national procurement laws and the expenditure declared for this contract is ineligible.

“Another main cause of error is ineligible expenditure. This is due to, for example, expenditure declared outside the eligibility period, overcharged salaries, the declaration of costs not related to the project, non-compliance with national eligibility rules, or revenue that has not been deducted from the declared costs.”

In its reply, the European Commission told the European Court of Auditors (ECA) it would follow up on a case and propose actions as it deemed necessary.

Transport Malta said in a statement that there were two public calls for the Coast Road and the tenders were issued in February 2013.

The cheapest bid, it said, amounted to €83million, €30 million over the stipulated budget.

Transport Malta negotiated with the cheapest bidder, bringing the bill down to €50 million and saving the project. All the negotiations were guided by the Department of Contracts and the public procurement rules in force at the time, it said.

The Times of Malta last week reported that the European Commission was investigating whether the government breached EU public procurement rules over the tender but had not yet decided whether it will withhold any funding from the project.

The EU had allocated €42.3 million to the Coast Road, or 85 per cent of the estimated €50 million cost eligible for EU funding. Malta was to foot another €10 million of the bills.

A few days ago, the Parliamentary Secretary responsible for EU funds, Ian Borg, announced that the government had decided to fork out an additional €11 million from national funds after the EU flagged up problems with the tendering process.

He said the country would not actually be losing any funds as those €11 million from the EU were to be used on other projects.

The ECA said that last year, it examined 175 public procurement procedures related to contracts for works and services underlying the expenditure for the transactions tested for ‘economic, social and territorial’ cohesion.

The estimated contract value for these public procurements amounted to approximately €3.3 billion.

The ECA identified instances of non-compliance with EU and/or national public procurement rules for 39 of the 175 procedures examined. 13 of these were serious failures to comply with these rules and thus classified as quantifiable errors

These errors account for 25 per cent of all quantifiable errors and make up approximately 2.7 percentage points of the estimated level of error.

 

 

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.