WasteServ comes clean on €29 million contract

WasteServ insisted that there was no wrongdoing in the contract awarded to JF Solutions for the provision of labourers, which hit the headlines in recent weeks following the publication of the Auditor General's report.

WasteServ CEO Ben Farrugia stressed "We have done everything by the book. The Auditor General maintained that we should have sought the approval of the Director General at the Budget Office, however we explained that the contract was given the go-ahead by the Contracts Department within the same finance ministry and the Budget Office was made aware when our yearly budget was approved."

In the Auditor General's report WasteServ was rapped for not seeking the Budget Affairs Director General's approval for changes to the contract which the report said was increased from €1.1 million to €29.1 million.

MaltaToday had sent a number of questions n this matter by email, however WasteServ said it would only provide answers in a meeting at its Head Office in Marsascala.

On getting to the offices next to the Sant' Antnin Waste Treatment Plant, we were greeted by WasteServ's CEO Saviour Abela, Chairman Ben Farrugia, Deputy Chairman William Spiteri, former CEO Vince Magri and the resources ministry's communications officer Keith Galea.

The chairman said the initial €1.1 million fee only reflected the estimated management fee, which then rose to €1.6 million.

Farrugia added that the €29 million figure was an extrapolation by the Auditor General who calculated the maximum cost of the contract if the sub-contractor provides the maximum number of workers allowed by the contract for four years.

WasteServ made it a point to explain that the agreement reached with JF Solutions for the first year of operation of sub-contracted labour and the additional three year extension were approved by the General Contracts Committee within the Finance Ministry and the Budget Office within the same ministry was duly informed when the office was asked for the approval of the yearly budget.

The WasteServ chairman said that the sub-contractor payment cannot exceed €1.6 million which is the maximum commission stipulated by the contract. 'The fee will totally depend on the number of workers needed by WasteServ," Farrugia said.

He also explained that WasteServ cannot employ any labourers directly as part of government's bid to reduce the bloated public service and therefore has to rely on sub-contracted labour. However, the WasteServ chairman made it clear that the contractor is bound to offer employees the same wages and conditions enjoyed by all civil servants.

CEO Saviour Abela noted that the waste management agency currently employs 108 persons directly, chiefly in management and executive positions.

JF Solutions provides just over 310 labourers which take the total tally of employees at WasteServ to around 420. This number excludes cleaners and security personnel at the various WasteServ sites which are also provided by a number of sub-contractors. JF Solutions is one of three companies providing security officers.

At this point, former CEO Vince Magri intervened and explained that when the initial agreement was signed with JF Solutions in 2008, this was a management contract, approved by the Contracts Department. He stressed that the contract only covered the commission payment to the contractor and did not include the wages and allowances to be paid to the employees.

The agreement stipulated that the contractor who was awarded the tender for the provision of personnel services was entitled to a 5.7% commission for each person employed. This commission could not exceed €1.6 million over the four-year period and the number of employees could not exceed 350.

WasteServ also noted that the contract period was increased to four years to ensure that the deal is sustainable and advantageous while the number of employees was increased to reflect the organisation's growth and its additional areas of operation in accordance to the needs of the agency.

CEO Saviour Abela pointed out that WasteServ does not foresee the need to employ more than 350 workers to run its sites and in fact at the moment the sub-contractor is providing just over 300 employees.

"This is a period contract, meaning that the agreement could be terminated at any time and the number of workers totally depends on the needs of WasteServ, allowing the necessary flexibility," Farrugia said.

The agency's management also pointed out that it issues around 180 tenders for period contracts every year for a number of services, including exportation and transportation of materials. "We issue a large number of tenders every year and the Auditor General did not point out any wrong doing in any of these contracts," the deputy chairman William Spiteri said.

The resources ministry communications officer Keith Galea said that the ministry's greatest annoyance was the Opposition's spin and said that a meeting with MaltaToday was set up became the issue was complex and both the ministry and WasteServ thought it would be best to explain the matter in person rather then on email.

In the wake of the Auditor General's report, Labour MP Leo Brincat called for the resignation of resources minister George Brincat and the WasteServ management adding that there was a "smell of corruption" at the agency.

However Galea, who intervened to spare the WasteServ management the embarrassment of getting involved in a political controversy, said: "We have no qualms in explaining our position. The Auditor General's report pinpointed a number of administrative shortcomings which happened over the last six years and we were, are and remain committed to remedy for any shortcomings."

He however said that in the case of the alleged €29 million contract, Labour retorted to a campaign of lies and spin instead of saying what its waste management policy is. "The only thing which is clear is that Labour has always hindered government's plans to treat waste and produce clean energy."