Corruption allegations into superyachts privatisation: investigation concerns invitation to tenderers to ‘grease wheels’ of evaluation process
Police call in Mimcol CEO
Matthew Vella The chief executive of Mimcol, Mario Mizzi, has been called in for interrogation by the Commissioner of Police in the ongoing investigation launched last week into corruption allegations on the privatisation process for the Malta Superyachts.
MaltaToday is informed Mizzi, long-standing head of the government’s investment arm, was summoned to the police headquarters last week, after Prime Minister Lawrence Gonzi reported the allegations – first made back in September 2009 – on Monday.This newspaper has learnt that Leonard Callus, a senior official in the prime minister’s secretariat, was in a meeting with bidders when he was personally informed of the damning allegation: namely of an invitation to tenderers to grease the wheels of the privatisation process, in the hope of a favourable outcome for the interested bidders.
Callus took the allegation to the finance ministry, which sought its own explanations from Mimcol but never reported it to the police.
The Prime Minister himself was alerted to the allegation after it was brought up by Opposition leader Joseph Muscat in parliament last week.
It is understood that police may now be looking into any illicit communication that could have taken place between Mimcol officials and bidders during the tendering process.
The Prime Minister has refrained from answering questions by MaltaToday pending the police investigation. One of these questions concerns statements by Gonzi and finance minister Tonio Fenech that tendering was suspended soon after the corruption allegations were made.
This newspaper has confirmed that Mimcol’s Privatisation Unit only cancelled the tendering process in November 2009, because it deemed the proposals for the superyacht facility were not “sufficiently satisfactory”.
Finance Minister Tonio Fenech has stated he summoned the members of the Privatisation Unit’s negotiating team to tell them about the allegation, which they all denied.
He did not report the allegation to the police, claiming this week that the allegation “was just hearsay” – an action at odds with similar investigations instigated by the government, namely in the allegations raised by Dr Frank Portelli on procurement contracts at Mater Dei hospital.
But when tendering was cancelled in November, bidders were told in writing that none of the proposals had satisfied the Evaluation Committee. No reference was made to any allegations of corruption at this point.
The finance ministry even retained the same members of the evaluation committee to oversee tendering, after accepting their denial of the corruption allegations. Asked by MaltaToday why the same people involved in the privatisation were retained to evaluate the bids, the OPM declined to answer.
After cancelling the tendering process, the PU invited all bidders to resubmit their proposals.
This decision irked bidders who had been actually shortlisted by the PU, but never approached to improve their offers. Initially, five firms had submitted offers for the superyachts facility: Neapolitan firm Palumbo, which has since acquired Malta Shipyards; the Manoel Island Consortium, which has since acquired the Manoel Island Yacht Yard; Melita Group; Hili Group; and CGA-CGM.
Hili and Melita were shortlisted, but after the cancellation of the tendering process, Melita decided not to resubmit a bid. Neither did CGA-CGM.
Instead, Palumbo and Manoel Island Consortium submitted a joint bid, a move which the finance ministry denied amounted to collusion. According to the ministry, the joint bid was permissible under the conditions laid down in the request for proposals.
What opens the PU to claims that it allowed collusion is that, in presenting a joint bid, confidentiality clauses could have been breached.
But the PU once again cancelled the process in February over claims that the offers are still not suitable, and a new call for tenders was never issued again.
Offers for the superyachts facility, by the far the most lucrative of the shipyard’s four units, were reportedly hovering at an average of €22 million, roughly €680 per square metre of land for 30 years (or €23/m2 per year).
The value of this land is even higher than the rental value attached to the 160,000 square metres of the Malta Shipyards, which at €90 million means the land is going for €566 per square metre over the 30-year period.
Police investigation The Prime Minister called for a police investigation into corruption claims surrounding the privatisation of the superyachts in response to a vague question on Monday by Opposition Leader Joseph Muscat.
Muscat asked whether the Prime Minister or his Office were aware of allegations that someone had asked for money in return for favourable treatment with any governmental tendering process.
Gonzi said he was told on Tuesday that a claim on these lines had been made to the OPM last September and asked for the Police Commissioner to investigate the claim.
Muscat said it was “disgraceful” that eight months had passed before an investigation was called.
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