The Privatisation Unit and MIMCOL - the government's investment arm - only approached legal firms 'that could deliver what was required' during privatisation processes. The two government entities also had clear instructions by the Finance Ministry that direct orders for the contracting of legal services had to be capped at €125,000. This and other conditions were always observed, the former Chairman of the Privatisation Unit, Manuel Ellul, told the Public Accounts Committee this evening.

The PAC is analysing the Auditor General's 'Investigation into the procurement of Legal Services by the Privatisation Unit between 2008 and 2013,' which was requested by the government members of the committee.

Three privatisation processes were carried out during the period under review, namely, the privatisation of Malta Shipyards Limited (MSL), the yacht marinas privatisation processes, and the re-concession for the rights of the National Lotteries. The National Audit Office report found that legal services were contracted via direct order in a number of occasions.

Mr Ellul, said the Privatisation Unit (PU) completed 20 privatisation processes and aborted four others during the time he served as Chairman, from 2000 to 2013.

Until 2002, the PU would issue a general call and would receive many bids for legal services, several of which would be deemed to be too low. The system then changed and the PU would identify around 5 firms that could handle what was required of them and ask for their proposals. They would be chosen on the basis of their financial offer. "We would already know that they could provide what we were asking of them. That is why we approached them in the first place."

Mr Ellul denied that there had ever been political interference.

In the case of the Ship Repair process, he said, the PU chose to contract the services of Fenech and Fenech Advocates, whose managing partner is Ann Fenech. "We chose this company on the basis of its experience in the maritime sector. The company had previously represented the dockyard in court and had vast experience. It was also representing the government in its efforts to keep the dockyard from closing down. Ann Fenech's company was approached and asked if it would offer its services."

Mr Ellul said during the process for a re-concession of the rights to the National Lotteries, the PU wrote to some five or six firms and chose the one with the most advantageous financial offer.

In the case of the Yacht Marinas, the PU and MIMCOL were entrusted to take over the process from the Malta Maritime Authority. "The MMA's lawyers, Mamo TCV, had already drawn up the request for proposals so we chose to work with them. Ann Fenech's company was called in to help sort a single issue when some unexpected problems came up."

Mr Ellul was asked to state the total value of three privatisation processes, which stood at around €180 million in income for the government. Legal fees amounted to some €536,000. Asked by PN MP Claudio Grech, Mr Ellul said he believed that the government got very good value for money.

Asked by PL MP Anthony Agius Decelis how the PU and MIMCOL would choose their lawyers, Mr Ellul said the firms had to have a sufficient number of lawyers for the job.  

"Whenever we asked the Finance Ministry to grant a direct order there would always be a capping of €125,000. There were also a number of conditions we had to abide by. In every single process we led, these conditions were respected."

Mr Ellul said Fenech and Fenech Advocates were paid around €300,000 during the period under review, but these included payments for different processes. The company was, in fact, contracted on five different occasions.

"I wanted to be well served. I knew from experience those who could live up to our expectations and those who could not. We had low offers from freshly graduated lawyers but I knew they could not perform up to standard.  We wanted to have the best possible lawyers so that if things ended up in court, as often happened, we would be well represented."

He admitted, however, that there might have been legal firms up to the task that were not approached. The committee Chairman, PN MP Tonio Fenech, argued that, if less qualified lawyers had been contracted, the PU might not have secured good offers.