Updated 5.10pm with GreenPak's reaction
Waste collection cooperative GreenPak has been accused by rival Green MT of getting taxpayers to subsidise its work to the tune of hundreds of thousands of euros, a claim which is expected to lead to court action.
In a statement issued on Tuesday, titled 'GreenPak should say the truth', Green MT alleged that its rival firm had saved “hundreds of thousands of euros” when local councils forked out public funds to pay to waste collectors between July 2013 and November 2017.
It suggested state aid rules had been violated when local councils in St Julian's, Qormi and Mosta paid tens of thousands of euros to third-party contractors for waste collection.
GreenPak rejected the claims and said it would sue its rival. (See below).
Green MT said the "cherry on the cake" was that GreenPak had also been paid, by Wasteserv, €48 for every ton of recyclable waste collected from the above-mentioned localities.
“Greenpak did not receive payment itself for the services but its contractors got paid directly from the local council instead of GreenPak Coop,” Green MT said.
“This naturally constituted a saving from GreenPak Coops’ funds running into the hundreds of thousands of euros over the said years, while Green MT continued to abide by the law and its permit obligations and paid for the collection of recyclable waste (as well as many other ancillary services such as the provision of bags, provision and servicing of bring-in-sites etc) out of its own funds.”
The accusation came one day after GreenPak spoke of tensions between Green MT and seven local councils in Gozo to publicise its free services.
"The members of the cooperative pay to provide this free service to the public through local councils and there is no compensation received from the government,” GreenPak CEO Mario Schembri said on Monday.
Green MT told seven Gozitan councils that they would have to start paying for the collection of recyclable waste from September 1, saying that the service was commercially unsustainable if it remained free.
In its statement, Green MT said it had already flagged concerns about GreenPak's business practices with authorities and was informed that the director of local government had been formally told to write to local councils and order them not to use public funds to pay for the collection of recyclable waste “and also to advise the department on how they were going to recuperate the funds dispensed illegally”.
Green MT highlighted three payments which it said were illegal and to GreenPak’s benefit.
GreenPak rejects claims, intends to sue rival
GreenPak in a reaction said it intends to sue Green MT following its 'defamatory statement', claiming it had violated state aid rules.
"Contrary to what was alleged, the state aid rules that Green MT is accusing GreenPak of breaching were actually performance-related contracts GreenPak had secured with St Julian's, Qormi and Mosta, which had sought to sever relations with Green MT," GreenPak said.
Furthermore, Green MT’s allegation related to sums paid by the local councils to GreenPak is untrue. The opposite actually took place since GreenPak paid the following sums: Mosta local council €112,000; the St Julian’s local council €27,000, and the Qormi council €90,000.
It said these councils were remunerated under the terms of a performance-related contract based on the number of green bags collected in each locality.
This legal practice ceased in 2017 following the publication of a legal notice.
"Green MT's unfounded allegations follow revelations in last weekend’s The Sunday Times of Malta that Green MT had notified local councils that it would be charging them for carrying out the door-to door collection of recyclable waste as well as a premium to service bring-in sites."
Green MT took this arbitrary decision after it was ordered by the Environment and Resources Authority last month to reverse its decision to discontinue the collection of recyclable waste from six councils in Gozo. The authority said Green MT was not entitled to take such action simply on the premise that this practice was not financially sustainable.