Palumbo declared preferred bidder in superyacht facility privatisation

Earlier this year, Palumbo SPA also bought Malta Shipyards, of which the superyacht facility used to form part.

In February, the finance ministry rebutted claims that it allowed the collusion of two bidders to present a higher offer for the Malta Superyachts (MSYS) privatisation, a process then mired in controversy after being twice stalled by the privatisation unit.

The firms, Palumbo SpA and the Manoel Island consortium, were two of the original five bidders for the lucrative facility but had not been shortlisted as preferred bidders.

The process was stopped back in November 2009 when the preferred bidders – Melita Group and the Hili Group – were asked to resubmit bids because their offers were not deemed to be suitable.

At this point, Palmbo and the Manoel Island consortium (which includes Midi plc, the Bianchi group and the Mizzi group) which arguably had bid lower than the preferred bidders, resubmitted a joint bid – a dubious practice given that the two firms were already competing bidders for MSYS, and one that opens up the privatisation unit to accusations that it blessed the union of two bidders bound by confidentiality agreements.

The finance ministry denied that Palumbo and the Manoel Island consortium had to be disqualified as laid down in conditions – which all bidders were aware of when they tendered back in February 2009 –which they could not enter into any form of collusive tendering.

“There was no ground whatsoever for the disqualification of any of the bidders. The Request for Proposals clearly provides for the possibility of two existing bidders to present a proposal in the form of a consortium,” a spokesperson had said.

Later in May, the process was also subject to allegations of bribery attempt involving secretary-general of the Nationalist Party, Paul Borg Olivier who presented himself to police after entrepreneur Beppe Hili said he informed Borg Olivier of kickbacks in relation to the superyacht privatisation.

In a statement, the Finance Ministry said that as announced on 2nd December 2010 the initial adjudicating process of the two bids for the Super Yacht Yard Facility was taken in hand. 

This adjudicating process was completed and both bidders satisfied the minimum required technical standards.  Following this the two bidders were invited for the opening of their financial offers. 

The ministry said that in the presence of representatives of both bidders, the financial offers were opened and Palumbo SpA, the bidder with the best offer of €14.4 million, calculated on the basis of the upfront payment and net present value of rent payable over 30 years, was declared as the Preferred Bidder this morning.

Palumbo’s offer – that of preferred bidder - was an upfront payment of €7.5 million and a rent of €500,000 per annum going up by 15 per cent every five years.

The minimum upfront payment required by the Request for Proposals was €6 million and a minimum rent of € 475,000 per annum increasing by 15 per cent every five years.