The company selected to partner Gozo Channel in bidding for a fast ferry service public tender had “failed miserably” in satisfying both the technical as well as economical criteria outlined in the request for proposals.
Read: Controversial fast-ferry service tender lands in court
The manner and extent of this failure were explained at length on Tuesday morning during proceedings instituted by Virtu Ferries, the company formerly selected to partner Gozo Channel, to obtain a warrant of prohibitory injunction to stop the State company from progressing any further in its contract with Islands Ferry Network Ltd, a joint venture between Magro Brothers Investments Ltd and Fortina Investments Ltd.
Ann Fenech, one of the lawyers assisting Virtu Ferries, explained how her clients had invested time and “hundreds of thousands” in resources over the past two years while conducting discussions with Gozo Channel with the ultimate aim being that of striking a partnership which would provide a fast ferry service between the islands.
What Gozo Channel lacked in expertise in fast ferry service, Virtu Ferries doubtlessly made up for, having operated within this specialised market since 1945.
The terms of the RFP had laid down that the selected partner was to have experience in fast ferry services and was to satisfy eligibility and capability criteria in the government tender.
An evaluation committee set up by Gozo Channel in 2017 had selected Virtu Ferries when unexpectedly “like a bolt out of the blue” the first RFP was cancelled, to be followed by a second request ultimately resulting in the selection of Islands Ferry Network Ltd, a company set up merely three days before the selection result was announced on April 13.
“This was no preliminary market consultation but a tender in disguise,” Dr Fenech argued, pointing out that the selected partner “totally failed” in terms of technical compliance since it lacked the necessary document of compliance issued for all operators of high-speed craft in terms of the International Safety Management Code under the Safety of Life at Sea Convention.
Magro Bros and Fortina Investments had “no experience in fast ferry services whatsoever”, Dr Fenech went on.
“In every competition one wins, one loses,” but it was illegal and abusive for Gozo Channel to enter into an agreement with a partner that did not satisfy the technical and financial criteria of the tender.
It was like a script for a TV comedy
The selected partner was expected to present its audited financial statements and balance sheets for 2016. Yet how could Islands Ferry Network Ltd do this once it had been set up on April 10, 2018, as attested by its Memorandum of Association presented in court.
Turning to the second evaluation committee appointed by Gozo Channel, chaired by Joseph Cuschieri, having as technical member Kurt Gutteridge and Simon Azzopardi as financial expert, Dr Fenech explained that the committee was unable to demonstrate satisfactorily how it selected a company which failed both on technical and financial grounds.
“It was like a script for a TV comedy,” the lawyer remarked, explaining how the chairman had repeatedly insisted that the board had consulted both technical and financial criteria outlined.
“How are Virtu Ferries to cooperate with Gozo Channel in the light of all this dispute?” Mr Justice Anthony Ellul questioned, even in the light of Dr Fenech’s earlier reference to a judicial letter filed against the state company, to be followed by a lawsuit for the judicial review of an administrative act.
“Discussions were always professional. There were no issues. This was totally out of the blue,” Dr Fenech replied, pointing out that her clients had sought remedy before the courts since the Public Contracts Review Board had thrown out its grievance - claiming that a preliminary market consultation did not qualify as a public procurement.
Rebutting these arguments, lawyers for Gozo Channel pointed out that proceedings before the PCRB had lasted some seven hours and “today’s case is an appeal from that appeal,” adding that 95 per cent of the submissions made by the applicant’s lawyers concerned the merits and were thus beyond the scope of the warrant proceedings.
Moreover, the applicant was basing its arguments on the wrong premise, giving rise to a surreal situation wherein Virtu Ferries had no prima facie right.
The conditions under the second tender were “fundamentally different”, Dr Antoine Cremona continued, adding further that the warrant proceedings were also premature since the decision of the PCRB was still to be confirmed.
“Virtu Ferries are running with the hare and hunting with the hounds,” the lawyer went on, pointing out that the point in time when public funds went into private pockets was upon the issue of the tender by the Transport Ministry.
“Is Gozo Channel going to pay its partner?” questioned the judge.
“If the tender is won, the funds will be paid by the Transport Ministry to Islands Ferry Network Ltd, but only if the tender is won,” Dr Cremona replied.
The case was adjourned for the court to decide whether the request for a warrant of prohibitory injunction against Gozo Channel is to be upheld.