Gianluca Vella Valletta, founder of project management company ACHV Ltd, warned that Maltese contractors are being misled by their suppliers over the true reasons behind soaring material costs.

In a powerful LinkedIn post, Mr Vella Valletta said that suppliers often blame “global chaos”, such as the war in Ukraine, the Houthi rebels in the Red Sea and EU policies, for jacking up their prices.

However, he warned that this is just “smoke and mirrors” and that suppliers often artificially inflate prices to steal contractors’ margins.

For example, Mr Vella Valletta pointed out that the Red Sea Crisis should have no impact on the price of steel, cement and gypsum shipped to Malta from Turkey and Egypt.

“Shipping from Turkey to Malta is a short hop across the Mediterranean. There are no Houthi rebels between Istanbul and Marsaxlokk. Shipping a container from Turkey costs about $600. Shipping from China costs $7,000,” he said.

“Here is the theft: Suppliers are buying cheap from Turkey but charging you as if they shipped it from China. They are pocketing the difference. It’s called ‘shadow pricing’ and it’s effectively fraud”

He said that while suppliers buy cement from Turkey for €90 per tonne, they charge contractors €228 per tonne - a 153% markup - for the same product.

He added that they buy Turkish steel for €600 per tonne but charge contractors €1,200 - €1,600 per tonne, equivalent to a 100% markup.

“They claim it’s for ‘risk.’ The only risk is you going bankrupt paying these prices.”

Mr Vella Valletta went on to point out that a bag of Mapei Kerabond T - a popular cement-based tile adhesive - retails for around €6 in Sicily, compared to €13 in Malta.

He argued that this massive cost disparity between two neighbouring islands rubbishes claims that Malta must accept higher prices because of its island status.

"Sicily is an island. They pay half of what you pay. The ‘Maltese Premium; isn’t about logistics. It’s about monopoly,” he warned.

Mr Vella Valletta pointed out that some construction supplies cost twice as much in Malta as they do in Sicily

“A handful of powerful families control the ports, the warehouses, and the exclusive agency agreements. They block parallel imports. They threaten foreign suppliers who try to sell to you directly. They have built a fortress to keep prices high and competition out.”

Mr Vella Valletta went on to warn that suppliers sometimes trap contractors by initially hooking them on ‘easy credit’, only to tighten the screws when they’re drowning in debt.

He said that if contractors can’t afford the invoice, suppliers ask them for an apartment instead, making them swap a liquid asset for an illiquid one.

And while contractors must sometimes wait four months to get paid by the government or developers, suppliers demand payment in 30 days or hit them with 12.5% interest fees.

Mr Vella Valletta urged contractors to sign up to a collective purchasing platform so as to import products directly from the source.

He also encouraged them to demand suppliers show them the bill of lading if they claim freight costs went up, and to reject fixed-price contracts without a fluctuation clause linked to international indices.

“The era of the blind handshake is over. Stop letting them pick your pocket,” he said.