How public subsidies to Gozo Channel went wasted

Vacant rented buildings of Gozo Channel belong to a previous client of chairman Joe Cordina.

Gozo Channel leased an Mgarr Harbour building for offices in 2019 for some €100,000 a year to leave them vacant instead.

Gozo Channel Ltd, a parastatal company that provides ferry services between Malta and Gozo, has had to rely on significant government subsidies to stay alive. Aside from severe losses associated with the ongoing pandemic, the ferry service provider faced a torrent of additional operating expenses, mostly as a result of the employment of extra employees and the awarding of tens of thousands of Euros in multiple “unnecessary” contracts.

Until 2018, taxpayers provided around €700,000 per year in subsidies to keep the Gozo Channel running. However, according to the company’s most current statistics, this sum increased to about €5 million in 2019. Although the accounts for 2020 have not yet been published, the government’s 2022 projections include an additional €10 million in subsidies for next year.

Despite this, the Public Service Obligation (PSO) agreement that authorised these payments under EU state aid restrictions ended in 2017 and was not renewed. For the previous four years, the Transport Ministry, which is in charge of this procurement, has stated that it is still working on the subject of a new tender. This raises questions about whether the subsidies provided to Gozo Channel following the termination of the PSO agreement are in accordance with EU state assistance standards.

With all of these financial troubles hanging over its head like Damocles’ Sword, Gozo Channel rented the old Ta’ Miema Supermarket in Mgarr as offices in 2019 for around €100,000 per year from A & J Hili ta’ Miema Ltd. The rented space was never used since.

Gozo Channel chairman, Joe Cordina, an auditor from Xagħra
(Photo: © Fred Guerdin)

A & J Hili ta’ Miema Ltd. was a client of the current chairman of Gozo Channel, Gozitan auditor Joe Cordina, the former Labour mayor of Xaghra and a general election candidate for the Labour Party (PL), who has served as Gozo Channel Chairman since the PL came to power in 2013.

The leasing of the supermarket premises raises serious concerns about poor planning and resource waste, as the property was abandoned for over two years after it was leased because the Gozo Channel lacked the funding to transform it into offices.

When approached by the local web news source ‘The Shift News,’ Chairman Cordina batted down any notion of a conflict of interest. He stated that the proprietors of Ta’ Miema stopped using his services in 2016 and that he was not engaged in the decision made by the company’s assessment committee.

While the actual cost of the lease, its duration, and the reason for its non-use remain unknown, this squandering of money has been described by Gozo Channel insiders as “another unnecessary expense to please someone using public funds,” and that in reality, no money was available for its refurbishment.