The Transport Ministry has been ordered to amend a call for a €20 million tender for the provision of passenger and vehicle ferry services in Malta and Gozo. The subsidised service is currently provided by Gozo Channel.
Upholding a number of objections made by Virtù Ferries, particularly on the terms of the call, the Public Contracts Review Board (PCRB) agreed the current tender, issued by Transport Malta, may be incongruent with EU rules, as it might restrict competition and the entry of new players to the market.
Following the filing of a “call for remedy” on the call for proposals issued by Transport Malta, in which Virtù contended that it was designed in a way to favour the incumbent State-owned Gozo Channel, the PCRB upheld an number of objections by Virtù and ordered the government to amend the tender.
In its decision, the PCRB, which is chaired by Anthony Cassar, determined that the Transport Ministry should extend the period before the new operator of the Gozo-Malta service was to start its operations from three to five months from the award of the concession.
Originally, the call obliged the new concession winner to start providing the service within three months.
Virtù argued, however, that this was too short a period and was clearly made to give an advantage to Gozo Channel, as it already operated the service.
The board also ordered the government to provide more information to Virtù Ferries, who are interested in putting in a bid to take over the whole service, as currently the information provided in the tender document, including on human resources and other agreements with third parties, may not respect the principle of equal treatment in the issue of such tenders.
Through this decision, the ministry was also instructed to issue a new closing date for the submission of offers for the whole tender, which originally was meant to close in April.
At the same time, the PCRB rejected a request by Virtù Ferries that the concession period of five years be lengthened, as the period was too short to recoup its investment.
According to the board the concession period is “appropriate and equitable”.
Transport industry sources described this decision as “a partial win” for Virtù Ferries, as the same board has still to decide on another objection filed by the same company on the way Gozo Channel chose an unknown company – Islands Ferry Network – as its fast-ferry service partner for the same tender.
The issue is two-pronged and has already been going on for more than a year.
As dictated by EU rules, the government is obliged to issue a competitive tender for a concession subsidising the ferry service every number of years, called a Public Service Obligation. Following an electoral pledge last year, the government issued a call in which apart from the conventional service, the new concessionaire is also to provide a fast-ferry service between Mġarr and Valletta.
In order to prepare its bid, Gozo Channel issued a separate offer, called a ‘preliminary market consultation’, asking interested parties to provide the State company with a fast-ferry service and join its bid for the PSO as its partner. Virtù Ferries was originally selected by a team of experts set up by Gozo Channel to be its fast-ferry partner.
However, following a change in the PSO tender conditions and reportedly direct instructions from the Office of the Prime Minister, the concluded selection process was cancelled and a fresh call was made by Gozo Channel with a different evaluation team chaired by Joseph Cuschieri – recently selected by the OPM as the CEO of the MFSA.
Following this second call, the Gozo Ministry last April announced that Gozo Channel had selected Islands Ferry Network to act as its partner for the PSO bid.
The selected partner, a company completely unknown in the fast ferry business, was registered just a few days before its selection and is owned by tomato products manufacturer Magro Brothers and the Zammit Tabona family – owners of the Fortina Hotel and Captain Morgan cruises.
At this stage, Virtù Ferries put up a legal challenge on both the original Public Service Obligation tender issued by the Transport Ministry and the offer issued by Gozo Channel to select its fast-ferry partner.