The tender process that would have handed over Valletta’s Evans Building to the private sector for its renovation and conversion into a luxury hotel is already awash with problems, as two rival groups of companies submitted separate appeals against decision to award the landmark building to Valletta Luxury Property.
The players involved are all joint ventures. Valletta Luxury Property, which has been selected as the preferred bidder, is made up of Eden Leisure and hotel entrepreneur Mark Weingard. Their proposal would have seen the arrival of luxury hotel brand Anantara to Malta’s shores.
Another is Iconic Hotel Malta – Nobu, made up of European School of English Limited (an English school that forms part of the Bianchi family’s holdings) and Arrigo Group of Hotels Limited. This group’s proposal would have brought over the Nobu Hotels chain to Malta.
The third is Katari Hospitality, involving GAP Group’s Paul Attard. Any relation between this group and the Qatar Government-owned Katara Hospitality remains unclear.
The db Group, Hili Group and AX Group also submitted their own bids, but have not (yet) submitted an appeal against the decision. These three placed lower than the others, and likely see little scope in challenging a decision to obtain an outcome that is still not to their advantage.
The property in question is the four-storey Evans Building, which was constructed in 1952 and has an area of around 3,327 sqm.
Under the terms of the concession, the winning bidder will need to retain the building’s exterior shell, but is allowed to make interior modifications, following a consultative process with UNESCO and the Superintendence of Cultural Heritage.
The concession will run for 65 years – a figure that is central to the case.
Last month, the contracting authority responsible, Malta Strategic Partnership Projects Limited (itself the subject of much controversy over the last years) awarded the tender to Valletta Luxury Property, despite this applicant ostensibly submitting the lowest bid of all – just €1.2 million.
For reference, Katari Hospitality JV’s bid was of €40.7 million, while that of Iconic Hotel – Nobu, was of €39.3 million.
However, the evaluation committee – controversially led by a criminologist, rather than anyone with any experience in the luxury hotel or contracts space – found, determined or otherwise decided that the €1.2 million figure referred to the annual fee, rather than to the grand total.
This would have placed Valletta Luxury Project’s total bid at €78 million – the highest by a stretch.
Whether it was in the evaluation committee’s powers to make that call, however, is now the subject of two separate appeals by the applicants that placed the second and third highest bids.
In the appeal of Katari Hospitality JV, filed by lawyer Ryan Pace, it makes the case that the assumption that the €1.2 million bid is on an annual rather than total basis is “nothing but conjecture”
“This does not, even with the greatest stretch of the imagination, reflect the actual bid,” reads the appeal, even arguing that “whichever way you look at it, the decision does not follow any logic.”
Dr Pace quotes case law to argue that any sums should have been submitted in their totality, with the bidder not expecting other entities to do their calculations for them.
On behalf of Katari Hospitality, he accuses the contracting authority of wanting “at all costs” to validate the bid of Valletta Luxury Projects – “even if this is diametrically opposed to what is inscribed in the tender document and against every principle of just competition.”
The objection contends that this is done “to the detriment of all those, like the this applicant (Katari Hospitality), who were diligent enough and submitted a offer in conformity with the tender document’s requirements.”
Foreseeing a defence that this is nothing but a basic arithmetic mistake that is permissible under the General rules Governing Tenders, Katari Hospitality’s lawyer argues that such defence is “legally unsustainable.”
The case, argues Dr Pace, is Valletta Luxury Property’s mistake in submitting an offer of €1.2 million is a mistake in the raw data and not a mistake in the arithmetic processing of that raw data.
“If that grant total was the result of a mistake or the fruit of carelessness, or if it was actually intended, is altogether irrelevant.”
Each of the five instances this argument of arithmetic processing can be invoked is broken down and rebuffed by Dr Pace, but among these are a set of sub-clauses that may very well prove to be the point the entire case rests on.
Specifically, the rules state that where this is a discrepancy between a unit price and the total amount derived from the multiplication of the unit price and the quantity, the unit price as quoted will prevail.
Katari Hospitality argues that “there is no ambiguity or discrepancy between the unit price and the total, since the tender does not include a ‘unit’ of any kind.”
However, when taking a closer look at the financial bid form all applicants had to fill in, it becomes evident that there is indeed what can be reasonably described as a unit price – the yearly concession fee, which is then automatically multiplied by 65 – the number of years of the concession – to arrive at the grand total.
The rules also allow for the evaluation committee to intervene in the sum of the grand total by stating that where a [yearly] rate has been entered by no total inputted, “the rate is to be multiplied […] to drive the total.” It even continues that where there is an error in addition in the grand total, “the evaluation committee will adjust with the correct amount.”
Whether Katari Hospitality JV's arguments will be considered favourably by the tribunal remains to be seen in a case that may push the contract's signing by months if not years.
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