Valletta's CVA doomed from the start because of poor technology

The transport authority’s chairman Mark Portelli headed an adjudication committee that ignored bidders from London’s own ‘congestion charge’ architects – that promised to capture 96% of cars entering Valletta – to instead choose technology with a 76% hit rate, and that is now losing serious cash.

Sources privy to the technical discussions said Portelli doubled up as chairman and head of the selection committee that eventually chose CVA Technology Ltd – a company whose shareholders include Anthony Mamo, until recently one of Portelli’s many business partners.

Only last month, transport minister Austin Gatt made the surprise declaration that Valletta’s CVA, the system he hailed as the capital city’s ‘saviour’ back in 2007, was not generating enough revenue.

That’s because CVA Technology’s system has a capture rate of just 76%, when rival bidders like Gasan Group and KDM Group were offering capture rates of 96% with technology from giants like Siemens and City Sync, the latter being the architect of London’s own congestion charge regime.

Instead it is CVA Technology Ltd that is raking in the cash: €5.4 million paid to it in tax money for running the system, when only €3.8 million was raked in from cars entering the capital city since 2007.

“Portelli had insisted he would chair the adjudication board himself… highly abnormal as chairman of an authority who is there to oversee the operation,” a source privy to the evaluation board’s told MaltaToday, who described Portelli as “an imposition on [former transport minister] Jesmond Mugliett.”

“The system supplied by [CVA Technology] did not perform to tender specifications, because over 20 cars in every 100 were escaping the system,” the source said.

The evaluation board’s decision stood, having overlooked the superior technical advantages of the other two tenderers. Portelli’s choice, as head of the board, fell on CVA Technology, whose relations with the transport chief hardly went unnoticed inside the transport ministry.

Updated with right of reply from Transport Malta and CVA Technology Ltd 24 December, 2010..

The Malta Transport Authority writes:

1.            Mr. Mark Portelli served as Chairman of the ADT for a two year term up to 31st May 2006. In his capacity as Chairman he chaired the adjudication committee for the tender relating to the design, development, implementation and operation of the Controlled Vehicle Access System for Valletta. At the time, Mr. Mark Portelli had no business connections with Mr. Anthony Mamo as was alleged in your article.  For the benefit of your disconcerted readers, the company referred to in your article was incorporated on 30th November 2007, a full 18 months after Mr. Mark Portelli ceased to be Chairman of the ADT. In view of his appointment as Chairman of Transport Malta as from 1st January 2010 the company referred to in your article was dissolved on 20th November 2009 in order to avoid any possible conflict of interest or perceived conflict of interest due to Mr. Anthony Mamo's involvement in CVA Technologies Limited.

 2.            Regarding the claim that Mr. Mark Portelli insisted he would chair the board himself, you are, once again, wrong in your assumptions. In high priority projects, it is quite normal for the Chairman or CEO to be involved in the evaluation process. As Chairman of the Evaluation Committee, Mr. Portelli was responsible for the overseeing of the evaluation process, but contrary to what is being claimed in the article, chairpersons of evaluation committees are not entitled to vote.  In fact, Mr. Portelli did not cast any votes and it was up to the adjudication board committee members to score each bidder, and recommend the most economically advantageous bidder to the Director of Contracts, before awarding the contract. In fact, the evaluation committee, in their technical evaluation, found that CVA Technology Ltd was the most technically compliant, scoring 53.0 out of 60.0 points, as opposed to the other bidders that scored between 37.8 and 47.0 out of 60. The committee reported that:

-          The technical proposal demonstrated a very high level of understanding of the project;
-          The tenderer demonstrated extensive detailed operational and technical solutions;
-          The tenderer guaranteed a success rate of 96% which exceeded the 95% requested in the tender. This was the only bi that exceeded the minimum of 95% as stipulated in the tender requirements. Mr. Vella's statement that other bidders offered 96% is incorrect as CVA Technology Ltd was the only bidder to offer such an accuracy rate;
-          The tenderer submitted a high level and detailed gantt chart, highlighting that they could meet the deadlines submitted in the tender. Furthermore, detailed work package descriptions were submitted for every process;
-          One of the Consortium members had extensive experience in Automated Number Plate Recognition (ANPR) technology, and together with the experience of the local partners, demonstrated the ability to handle this project.

It is pertinent to note that the evaluation was based on a three package system and hence, the evaluators were not aware of the   financial submissions until the technical evaluation was completed, and endorsed by the Department of Contracts. At that point, the cheapest of the technically-compliant submissions was automatically selected and awarded the contract.

3.            In his article, Matthew Vella states that the technology offered by CVA in its response to the Invitation to Tender for the Controlled Vehicular Access System in Valletta was "vastly inferior to other bidders' systems" and that the said technology has an accuracy rate of 76%. It is totally untrue that the system has an accuracy rate of 76%. The contract with CVA Technology Ltd establishes a minimum accuracy rate of 96%, which as explained above, exceeds the minimum of 95% which was established in the tender document. This accuracy rate of 96% has been audited by independent auditors engaged by Transport Malta, who have confirmed that the minimum accuracy rate is being achieved.  In the most recent report carried out in February and March 2010, the audit firm concluded that the accuracy rate of the technology was 97.7%. The system is maintained, supported and enhanced by specialists who are also engaged to carry out monthly accuracy tests in order to ensure that the maximum error margin is not exceeded.

 4.            Regarding the claim that Mr. Portelli appointed Ms.Francesca (according to you, column 2 on page 6, Francesco) Grech on the board of the Maritime Directorate of Transport Malta, this is also incorrect. Board members are always appointed by a Minister. In this case, Ms Grech had been appointed by the then Minister for Transport, and was already on the board of the Maritime Authority before Mr. Portelli was appointed Chairman.

 5.            Mr. Vella also claimed that exemptions were granted as an afterthought. This is once again incorrect. All exemptions are established at law, in terms of the Vehicles Access Zones (Control)   Regulations, LN 105 of 2007. Two of the exemptions mentioned by Mr. Vella - those granted to Members of Parliament, and relatives of elderly residents, are subject to an annual fee of Eur46.50 per vehicle.

To conclude, contrary to what Mr. Vella insinuated, the CVA system was developed by industry specialists that are recognized as leaders in the field. Furthermore, various components have received international recognition and have been successfully deployed in the UK, US, Abu Dhabi and Australia. In fact, the technology behind the system implemented by CVA Technology Ltd. has drawn interest from international industry experts, policy makers and system integrators.