Central Bank procurement: transparency is key

Source: Mr George M. Mangion¸ PKF Malta

As published on The Malta Today on Wednesday 4th December 2013


Amidst ongoing scandal such as that pertaining to Enemalta and now Mater Dei¸ the writer can tell his own tale of intrigue which has hit an SME last month. The case involves procurement and more accurately Tender No 4/2013: Survey on Household Finance and Consumption in Malta¸ issued by the Central Bank of Malta in June 2013.

The procurement department received three bids but finally decided to award the tender to EMCS (€93¸263) at three times the cheapest bid (€37¸000) without justified reasons for refusal to the cheapest bidder. Despite an appeal process that left pretty much all to be desired¸ such reasons of refusal which are every bidder’s basic right were only to be purported to be offered to the appellant SME in open press last Sunday and this only following some releases of appellant’s own whereby the demand for such reasons and the injustice of their denial until that point continued to be driven home.

Given that the CBM survey tender was awarded to EMCS¸ where the wife of the Deputy Governor works¸ and the CBM tender issued two years ago was also awarded to the same EMCS¸ this exposes a blatant conflict of interest that arises as a matter of fact. In addition¸ this clearly acts to defy the Central Bank’s chief dictum of awarding tenders to different and new entities¸ thereby giving new entities a chance and avoiding stagnating quality levels¸ as expressed by CBM complaints officer to SME during appeal meeting¸ In an article published in It-Torca dated 1 December 2013 that ‘at no stage was the Deputy Governor involved in the evaluation process’. While not surprising¸ however this does not add or remove to the conflict of interest which was¸ is and continues to be seen to subsist. Stating in words that the Deputy Governor was not involved where this is not supported by facts¸ does not add anything to independence and transparency which was seen to be lacking.

Conflicts of interest are to be disclosed from the outset¸ and should have so been disclosed when the appellant SME was informed of the rejection¸ and not now¸ through the press and only as a retaliation once the conflict of interest was made reference to by the appellant SME. An article on It-Torca published last Sunday bore a bold title referring to CBM Governor reading ‘Lest niehu gurament li ma sar ejn hazin’ (‘I am prepared to swear under oath that no irregularities took place’).

Grudgingly¸ not even a sworn declaration can help erase a conflict of interest for this is a matter of fact¸ which therefore only action can remedy. In reality it does not much matter whether the Deputy Governor was involved or not¸ for what does matter in terms of conflict of interest is the perception¸ and this lingers on.

For transparency’s sake¸ tenders were given to firms with family connections under the previous administration: is it now being condoned under the present administration?

In its defence¸ the SME cites an article published on the Malta Inde