Malta Chamber Demands Sweeping Procurement Governance Overhaul Amid Malita Investments Controversy

Chamber Calls for Clear Demarcation in Public Contracts

The Malta Chamber of Commerce, Enterprise and Industry has issued a strong demand for a sweeping governance overhaul in public procurement, advocating for a clear separation between political direction and the executive responsibility of the civil service in the awarding of public contracts. The influential business lobby reiterated its long-standing call for reform on Thursday, November 27, 2025, citing 'the latest developments concerning Malita Investments plc' as a catalyst for its renewed urgency.

The Chamber has been a consistent advocate for public procurement reform since 2021, emphasizing the need for a robust, transparent, and accountable framework.

Malita Investments Controversy Highlights Systemic Issues

The recent controversy involving Malita Investments plc, an entity that is 81% government-owned and publicly listed, has brought the issue of procurement governance to the forefront. Former Labour MEP Marlene Mizzi publicly accused Housing Minister Roderick Galdes of 'interference in the workings of a plc' and 'hobnobbing with contractors,' claims she stated led to her removal as Malita chair in May 2024. Minister Galdes, in response, maintained that his involvement was limited to 'general political oversight' rather than operational intervention. The situation further escalated with the resignation of Malita's executive chair, Johan Farrugia, after only eight months in the position. Malita Investments has also reportedly faced liquidity challenges and financial difficulties this year.

The Chamber stressed that such situations, 'whether they effectively happened or not,' underscore the urgent need for a system that eliminates doubt regarding public contract awards.

Rationale for Reform and Key Recommendations

The Malta Chamber argues that every euro of public expenditure must be governed by 'clear rules, effective oversight and ethical conduct' to safeguard public interest, ensure value for money, and guarantee a level playing field for all businesses. It warned that a lack of transparency and efficiency in public procurement 'undermines trust in institutions, distorts competition, discourages reputable operators and can result in significant waste or misuse of public funds.' Public procurement constitutes a substantial share of total government spending and directly impacts economic competitiveness, public services, and the overall quality of life in Malta.

To address these concerns, the Chamber has outlined several key reforms:

• A clear governance framework that prevents ministers from influencing who wins contracts, ensuring they define vision and goals but not operational decisions.
• The publication of a publicly accessible procurement outlook at least six months in advance, covering all government entities and departments.
• A shift away from the 'cheapest compliant bid' mindset towards quality-based evaluations.
• Systematic preliminary market consultation and the use of genuinely independent experts in drafting tender documents.
• Stronger scrutiny of direct orders and contract variations, supported by full documentation and justification.
• The establishment of a comprehensive, user-friendly public Contracts Register detailing all tenders, milestones, payments, disputes, variations, and modifications.

Call for Immediate National Priority

The Malta Chamber concluded its statement by urging the government, parliament, and oversight institutions to treat public procurement reform as an 'immediate national priority,' rather than a long-term aspiration. The Chamber has consistently presented proposals for good governance, including its 'Ethical Business Calls for Change – A Manifesto for Good Governance,' highlighting these concerns and offering solutions over the years.