NAO complaint on possible misuse of public funds by the Mosta Local Council and the Planning Authority

Tenders issued by the Mosta Local Council, and public funds disbursed by the Planning Authority from the Development Planning Fund (DPF), are the subject of a complaint The Daphne Caruana Galizia Foundation filed with Malta’s National Audit Office. The tenders concern the creation of an outdoor gym located at Kulleġġ Maria Reġina, Triq l-Inkurunazzjoni, Żokkrija, Mosta.

When compared to the costs of a similar project carried out in another locality, and considering the relative size of the projects, the sums involved in the Mosta Local Council tenders raise questions over their legitimacy. The complaint urges the NAO to investigate whether there is a legitimate economic rationale for the tenders and, consequently, the public funds disbursed by the Planning Authority.

Background

In 2018, the Planning Authority (PA) and the Mosta Local Council (MLC) entered into a contractual agreement regarding the creation of an outdoor gym. The original contracted sum was €174,732.88.

On 27 May, 2022, the MLC noted that the overall expense of this project was €195,958.21 and that Development Planning Funds had already paid the MLC €52,419.86. This sum represents 30% of the Qualifying Amount that covered Payment Phase 1.

On 19 August 2020, the MLC issued a payment voucher to Salvin Limited in respect of equipment, rubber, benches, and above ground variation. The amount invoiced was €124,162.36. This cost included €56,177 for the equipment as per tender; €12,661 for rubber flooring as per tender; €2,808 for six benches; €29,626.35 for additional rubber; €3,950 for above ground variation; and VAT at 18%. The invoice was dated 1 July 2020.

The equipment costs included the supply, transport, assembly and installation, and certification of the following eight pieces of equipment manufactured by “HAGS”: an air walker; a structure with three functions aimed at movements of different body parts; a structure with multiple beams with multiple functions; a structure with two functions aimed at twisting the body; a structure with beams aimed at dipping; a play item for children under five years with a pedalling function; a structure with two functions aimed at pulling and pressing movements of the upper body; and a rower.

On 11 November 2021, Salvin Limited also invoiced the MLC the sum of €8,405.52 in respect of a part payment on play equipment and rubber flooring for this outdoor gym (Site 3). This means that Salvin Limited received €132,567.88 of the €195,958.21 that were spent on the project; 67.65% of the total sum.

Salvin Limited has also been paid at least €173,300.95 in relation to equipment and works done at Site 1 in Ġnien Ġorġ Grognet de Vasse, Blata l-Għolja, and €37,533.89 in relation to equipment and works done at Site 2 in Ġnien 15 t’Ottubru, Zokkrija. These payments were all in relation to tenders awarded to Salvin Limited by the MLC.

According to a media report, a fully functional outdoor gym in Saint Paul’s Bay cost around €15,000. This included four pieces of equipment costing around €2,000 each, and the installation, works, and rubber flooring.

In his response to an email in which we requested a breakdown of the costs of the Saint Paul’s Bay outdoor gym, Scott Schembri, the co-founder of Bulletproof Culture, attached the following screenshot of the invoice for the equipment and installation which was proposed by Bulletproof Culture in the tender for the park, which was from a local supplier:

Mr Schembri added that there were further costs to the installation which were settled between the supplier and the MLC directly. He emphasised that the total cost of installation, equipment and flooring/mats definitely did not pass the €15,000 mark. In a follow-up email, Mr Schembri confirmed that the pieces in question were sourced from Kenguru Pro. As per the company’s website, K-001, K-006, K-016, and K-018 refer to the french triple push up bar, the Swedish wall, the triangular pull-up bar, and the double parallel bars respectively.

For further comparison, another supplier provides similar equipment all for under €5500. For example, the outdoor rowing machine costs €2800, as opposed to the €7,429 that Salvin Limited charged the MLC for the rower. Another example is the outdoor twister which costs €1900, as opposed to the €5,132 that Salvin Limited charged for the twister. This means that Salvin Limited charged the MLC more than double what other suppliers are charging for the same type of outdoor fitness equipment.