Water agency bypassing public procurement rules via infrastructure Malta

The government has found an “innovative” way to bypass public procurement regulations by awarding millions in roadworks directly to friendly contractors without any competition or public tenders.

Instead of using the competitive bidding system required by law to carry out the kilometers of roadworks associated with the installation of sewage and waterworks systems, the Water Services Corporation, under the supervision of Minister Miriam Dalli and its CEO Karl Cilia, is directing this work to Infrastructure Malta through direct procurement.

Although on paper Infrastructure Malta is listed as a WSC contractor and receives direct remuneration for services provided, in reality this is not the case.

Using their so-called framework contract, or direct procurement system, Malta infrastructure officials allocate the work to be carried out on WSC’s behalf among private road contractors of their choice, awarding them directly hundreds of thousands of works without submitting a bid.

Senior government officials told The Shift that this “system” is merely aimed at bypassing tender procedures and is illegal.

“This is a new roundabout way created by the government to bypass public procurement regulations. Millions are being spent this way and the system is completely irregular,” they said.

Government officials have warned that the system is being misused by other government agencies, including Enemalta, in work involving the installation of distribution cables that also pass through Infrastructure Malta.

8 million euros in six months

Analysis of direct contracts awarded by the Water Services Corporation in the last six months of 2023, as published in Government Gazettereveals the scale of abuse.

Between July and December 2023, WSC issued over 70 direct contracts to Infrastructure Malta for works related to the excavation and installation of sewers and waterworks.

The total value of direct orders that went to various road contractors was EUR 8 million.

While some of the works could be considered minor, valued at less than €50,000, which required a tender under the regulations, in other cases the orders placed directly with Infrastructure Malta were of a huge size.

In one case involving sewage works at Triq il-Marfa in Mellieha, the direct order was for over €1 million. No one knows which contractor was selected by Infrastructure Malta officials for this direct order.

Other significant direct contracts distributed through this system included €508,000 for works in Naxxar, a further €322,000 in Naxxar and a contract of €316,000 for works in Victoria on the island of Gozo.

The Chairman of the WSC is civil servant Joe Vella and the Director General is Karl Cilia, directly elected by Minister Miriam Dalli.