GWU’s office lease to ARMS valued at €309,750

The General Workers Union will be receiving €309,750 for leasing to ARMS Ltd part of its Valletta headquarters, originally built on public land leased to it by the government and for which the union pays a yearly €801 (Lm344) perpetual ground rent.

The trade union was awarded the five-year ARMS contract following a request for proposals issued by the billing company in February last year. Three bids were submitted and the GWU’s was chosen as the preferred bid.

The other two bids offered a space at €790 per square metre per annum, VAT excluded, and a second one offered an office space at €150 daily, plus €150,000 in advance as premium.

“ARMS published a request for proposals in all newspapers. ARMS based its decision on commercial grounds as the building in question was the cheapest offer. ARMS is paying €177 per square metre per annum to rent the 350 square metre office. The duration of the contract is five years,” ARMS’s marketing manager, Nikita Zammit Alamango – who happens to be a director on ARMS’s shareholder, the Water Services Corporation – told MaltaToday.

The award of the contract has however been flagged by the Opposition, once it emerged that ARMS – a public entity – was not eligible to take over the space formerly housing the GWU’s insurance and tourism offices.  

Denouncing the “breach of a public lease contract”, shadow justice minister Jason Azzopardi said he wants the Public Accounts Committee to see whether the GWU’s public lease was breached, what the Lands Department’s advice on this issue was, who was responsible for the government’s approval, and which public officials were involved in the matter.

In 1957, the Maltese government granted the GWU a perpetual emphyteusis on public land for the union to build its headquarters and to use the premises solely for trade union activities and its Union Press. In 1997 the union moved its press to Marsa, and requested an amendment to the contract to allow the utilization of the space left vacant.

The amended deed allowed the GWU to transfer, assign or let to any company in which the GWU has over 51% of the shareholding ­– which excludes government-owned ARMS. A curious condition to the deed was that 5% of annual profits after tax from any commercial undertaking carried out in the premises, were to be deposited into a fund managed by the General Workers Union “for the specific objectives of promoting consumer affairs for the benefits of the general public”.

The Valletta office is not the only property that the GWU is leasing to a public entity.

Transport Malta last year awarded a contract to Paola Estates Ltd following an open tender that attracted six bids.

Paola Estates are a wholly-owned subsidiary of GWU Holdings Ltd, whose directors are union secretary-general Tony Zarb and president Victor Carachi. In 2007, the company held some €2 million in assets.

“Transport Malta is looking forward to moving to a more functional location, consolidating its functions of Land Transport and Roads Directorate which are currently scattered in different locations. The office space is that of circa of 3,376 square metres at an annual rent of €490,000 including VAT. This building will provide office space for around 250 people,” Transport Malta CEO James Piscopo told MaltaToday.

The move is planned for the coming summer.

Piscopo confirmed that the five other bidders were FXB Qormi Ltd, Toncam Properties Ltd, Valletta Cruise Port Plc, Unitrade-Bezzina JV and KA Holdings. No appeals were lodged.

Piscopo was however reluctant to divulge the names of the members of the evaluation committee.

“The evaluation committee was composed in accordance with procurement regulations. In this case it was made of two senior managers, one manager, one lawyer and one secretary,” he said.

In 2010, the GWU company purchased 1,800 square metres of basement garage spaces for €302,818 at the A3 Towers, and the ground floor’s showroom, cafeteria, and the first floor's showroom and second-floor ‘mini market and pharmacy clinic’ for €1.16 million; and then another 35 underlying garages for €285,349 in 2012.

Altogether, the GWU purchased the basement levels and first two floors of the Montebello's A3 Towers for €1.74 million.