Updated 7.28pm - Added ministry statement
Education Minister Evarist Bartolo ordered that a contractor be paid more than €400,000 for works that had not been approved by the Foundation for Tomorrow’s Schools, documents show.
According to the FTS board, the contractor, Avantgarde Projects Limited, was not in line with tender obligations issued in 2011 and carried out works at St Ignatius College in Ħandaq, Qormi, without its approval.
However, in 2015 Mr Bartolo endorsed a recommendation by his ministry’s permanent secretary, Joe Caruana, to overrule the FTS and settle the contractor’s claims for payment.
In reply to questions, the ministry said yesterday that the payment was a commitment carried over from the previous administration.
However, sources close to the FTS board said that Edward Caruana, the minister’s canvasser and the permanent secretary’s brother – who is under police investigation over claims of fraud and corruption in a separate case – had “exerted pressure on the board to clear the payments with the company”.
In his efforts to do so, he had attended board meetings on behalf of Mr Bartolo, the sources said.
Research by this newspaper shows that before the 2013 election, Avantgarde Projects won an FTS tender for tiling and marble works at St Ignatius College.
FTS documents show that during the works, the contractor started claiming much higher payments than those stipulated in the contract and was non-compliant in his programme of works.
Despite repeated warnings in writing from the FTS management not to carry out any unapproved work, the contractor kept at it and eventually presented his unapproved bills to the FTS – which refused to pay up for the additional works.
Circumstances changed after March 2013 when Labour won the general election.
The documents show that Mr Bartolo was immediately informed that the pending bills should not be paid as they had not been approved and the works had been irregular. However, the minister insisted that an out-of-court settlement should be reached.
Through his permanent secretary, Joe Caruana, Mr Bartolo then ordered the FTS to draw up a report on Avangarde’s claims.
The foundation continued to maintain that the claims could not be settled and that the contractor should contest its decision in court or through an arbiter, as is the usual procedure.
In the meantime, the FTS’s technical department made an estimate of the maximum value of the works and calculated that the claim under dispute should be no higher than €368,000.
Instead of going to court, however, Mr Bartolo signed off a memo presented to him by his permanent secretary stating that “in order to settle the issue”, FTS should pay Avantgarde €418,000. This is a sum higher than the FTS’s maximum disputed value.
Mr Bartolo’s decision, taken in October 2015, was at first resisted but finally approved by the board in January 2016.
Asked to state why the minister felt the need to intervene personally in this issue and to declare whether he had met the contractor together with Edward Caruana, a spokeswoman for the ministry did not reply to those questions.
However, she said “the Ministry took steps to finalise the case since there was a commitment to this particular company from the FTS chairman under the previous administration (Ray Fenech) to honour additional billing”.
She added that the compromise agreed upon was that the estimated median sum between those of the FTS and the contractor was to be the final settlement.
The ministry also confirmed that the file on this case is also under investigation and has been collected by the Internal Audit and Investigations Department and the police “following a request by the Ministry to look into the operations of the FTS in toto”.
According to the ministry, the settlement of the Avantgarde payments was one of the pending debts carried over from the previous administration which amounted to some €80 million.
Only a few weeks ago, as he was defending himself against claims made by former FTS CEO Philip Rizzo, Mr Bartolo invoked the “autonomy of the FTS” to explain that he did not intervene in the work of the foundation. Mr Rizzo had resigned as CEO after accusing Mr Bartolo of trying to dissuade him from reporting abuses by his canvasser, Edward Caruana.
The minister insisted he did not take any part in FTS decisions and this was why the government had separate foundations to manage its business.
Ministry denial
In a statement, the Education Ministry said that the additional work was requested by the FTS "under the previous administration, with the understanding that it would pay for such additional works".
The case dated back to before the change in administration, with media reports from 2013 showing that Avantgarde had alleged irregularities in relation to the Ħandaq school by the person running FTS in 2012, the ministry said in a statement.
"It is worth noting that the FTS works being mentioned were commissioned in 2012 without any care for public procurement regulations," the ministry said.
"Had public procurement regulations and proper project management been followed by FTS in 2012, there would be no case whatsoever and payments would have taken place on time in a normal manner and work would have completed on time."
The ministry said that it had paid the contractor at the same rate they had won the tender at, with the total amount being "considerably less" than the total demanded.
It said that the FTS was left in a "shambolic state by the previous administration, with over €80m in debt and countless unpaid bills", and that, following the change in administration, the decision had been made to pay where works had taken place.