Court reinstates Valletta Luxury Projects as winner of Evans Building concession

Valletta Luxury Projects (VLP) has won back the multi-million-euro concession to redevelop Valletta's historic Evans Building.The decision comes after the Court of Appeal overturned two Public Contracts Review Board (PCRB) decisions that had stripped it of the award last March.On Thursday, the court ruled a discrepancy in VLP's financial bid amounted to nothing more than a clerical mistake and did not constitute an unlawful amendment to its tender.The decision clears the way for VLP - a joint venture between Benny Ltd, linked to businessman Mark Weingard and the Anantara luxury hotel brand, and the Eden Leisure Group, belonging to the Decesare family - to proceed with the redevelopment and management of the prominent waterfront landmark under a 65-year concession.The Evans Building, occupying a prime site in Valletta near Fort St Elmo, has long been earmarked for transformation into a high-end tourism accommodation project.Residents and environmental groups have long opposed the development, which attracted bids from some of Malta's largest hospitality operators.In a joint statement issued last March, the organisations said residents had been led to believe that the four-storey building, occupying some 3,327sq.m of land, would be transformed into a long-promised residential care home for Valletta's ageing population.The 78.6 million mistakeBidders were competing under a best price-quality ratio system for the right to transform the former military hospital into a superior-quality tourism accommodation establishment.The concession required a minimum annual fee of 302,000, together with a fixed annual ground rent of 146,000 payable to the Lands Authority.VLP had entered an annual concession fee of 1.2 million in its electronic financial bid form and calculated a corresponding concession value of 78 million over the concession's lifetime.However, in a separate field on the electronic tendering portal, where the total sum of the tender was to be inputted, the consortium mistakenly entered 1.2 million instead of the cumulative 78 million figure.When the tender's evaluation committee spotted the discrepancy, they requested clarification from VLP.VLP confirmed that the intended total was 78 million, and the committee accepted the correction.That decision later unravelled when rival bidders Katari Hospitality JV and the European School of English (ESE), forming part of the Iconic Hotel Malta-Nobu Consortium, challenged the award before the PCRB.Both argued that the correction amounted to an impermissible alteration of the bid after submission.The PCRB agreed and annulled the award.Court: Rivals' interpretation would lead to an absurd resultHowever, the Court of Appeal took a markedly different view.The judges said that accepting the rivals' interpretation would lead to an absurd result.Had VLP genuinely intended to offer 1.2 million over the entire 65-year concession period, this would have translated into an annual fee of a miserable 18,461 - barely 6.1 of the minimum amount required by the tender - a figure that would have resulted in automatic disqualification from the very start.It is highly improbable, the court observed, that a consortium such as VLP would go through the considerable effort required to prepare the extensive documentation demanded by the tender, only to submit an annual concession fee amounting to around 6.1 of the minimum threshold.The court said that the correction merely crystallised what had been clear from the outset and did not amount to the submission of a new offer.Public interest would have been short-changedIn reaching its decision, the court also endorsed arguments that the public interest would have been undermined had the bid been discarded over a clerical mistake.VLP had argued that disqualification would have deprived the State of approximately 37 million in concession income compared with the next-best offer. The court agreed.It said that discarding such a strong bid over a mere formality would be a disproportionate punishment because by their nature, such shortcomings do not affect anything at the core of the offer.Objections by rival biddersThursday's judgements also swept aside a series of objections raised by rival consortiums.The tender had attracted some of Malta's biggest hospitality and development groups.VLP and its 78 million bid had emerged ahead of rival consortia including Katari Hospitality JV, led by Paul Attard, which offered 41 million, and the Iconic Hotel Malta-Nobu Consortium, comprising the European School of English (ESE) and Arrigo Group of Hotels Ltd, which submitted a bid worth 32.5 million.Other bidders that submitted financial offers included HV Hospitality, the hospitality arm of Hili Ventures (24 million), AX Group (22.6 million), and db Group's Seabank Hotel and Catering Ltd (20.9 million).One of the main challenges came from ESE, which had appealed independently despite having participated in the tender as part of a consortium.The court rejected their appeal. Although ESE had sufficient interest to challenge the bid, its consortium partner, Arrigo Group, had sat out the appeal.The court said that it could not seek to revive the bid unilaterally, without the involvement of its partner.ESE's bid had originally been disqualified because its debt-to-equity balance between 2018 and 2020 stood at 3.88, exceeding the maximum permissible threshold of 3 established by the tender documents.The court also dismissed allegations that procurement deadlines had been manipulated to favour Paul Attard's Katari Hospitality JV.ESE had argued that extensions granted in 2023 allowed Katari Holdings - now Plan Property Holdings Ltd - to revise financial statements lodged with the Malta Business Registry in order to meet gearing ratio requirements.The court found no evidence to support those claims.Instead, it accepted that the initial six-week extension had been requested by a bidder because of difficulties in obtaining a required Design Rating Performance Certificate.Subsequent short extensions were justified by documented technical problems affecting the new WebTPT system in the government's procurement system.The court noted an extension was required because of a 200MB upload limit, and that another extension was granted because the electronic procurement system was failing to allow bidders to upload more than four parts of their submission.Not the PCRB's role to scrutinise company accountsThe court stressed that neither the PCRB nor evaluation committees are empowered to conduct forensic examinations into audited company accounts filed with the Malta Business Registry.It is neither within the competence of the Board, and much less the evaluation committee, to investigate whether a company's financial statements were prepared properly or whether they faithfully reflect its financial position, the court said.The fate of Evans buildingEnvironmental and community groups, including Flimkien għal Ambjent Aħjar, Friends of the Earth Malta, Moviment Graffitti, Moviment Azzjoni Soċjali and Residenti Beltin, have long opposed plans to convert the Evans Building into tourism accommodation.In a joint statement issued last March, the organisations said residents had been led to believe that the landmark building would be transformed into a long-promised residential care home for Valletta's ageing population.They accused successive governments of dressing up commercial redevelopment as regeneration while ignoring the social consequences of tourism-driven projects.Residenti Beltin spokesperson Billy McBee described the Evans Building as a symbol of broken promises and political betrayal.He said that the absence of a care facility reflected a lack of political will to prioritise residents over commercial interests.