Water agency bypassing procurement rules through Infrastructure Malta

The government has found an ‘innovative’ way to bypass public procurement rules, dishing out millions of road works directly to friendly contractors without any competition and issue of tenders.

Instead of going through a competitive tender system, as required by law, to carry out kilometres of road works in connection with the installation of sewer systems and water mains, the Water Services Corporation, under the remit of Minister Miriam Dalli and its CEO Karl Cilia, is diverting these works to Infrastructure Malta through direct orders.

While Infrastructure Malta appears on paper as a contractor of the WSC and is paid directly for the service, this is not what actually happens.

Using its so-called framework contract, a system of direct orders, Infrastructure Malta officials distribute the works to be done on behalf of the WSC among private road contractors of their choice, giving them hundreds of thousands of works directly without ever submitting a bid.

Senior government officials told The Shift that this ‘system’ is only intended to bypass tendering procedures and is irregular.

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

Government officials warned that this system is being abused by other government agencies, including Enemalta, for works related to installing distribution cables, which are also passed on through Infrastructure Malta.

Karl Cilia, the WSC CEO responsible for bypassing procurement rules.

€8 million in six months

An analysis of direct orders dished out by the Water Services Corporation during the last six months of 2023, according to data published in the Government Gazette, reveals the extent of the abuse.

Between July and December 2023, the WSC issued more than 70 direct orders to Infrastructure Malta for works related to trenching and installation of sewers and water mains.

The direct orders, which ended up at various road contractors, totalled a staggering value of €8 million.

While some of the works may be considered small, of less than €50,000 in value, which, according to the rules, still required a tender, in other cases, the direct orders to Infrastructure Malta were of massive proportions.

In one case involving sewer works in Mellieha’s Triq il-Marfa, the direct order amounted to more than €1 million. No one knows which contractor was selected by Infrastructure Malta officials for this direct order.

Other significant direct orders distributed through this system included €508,000 for works in Naxxar, another €322,000 in Naxxar, and a €316,000 contract for works in Victoria, Gozo.

The WSC is chaired by Joe Vella, a civil servant, while Karl Cilia, Minister Miriam Dalli’s direct choice, serves as its CEO.