Contractors currently face a five-year retainer on 25 per cent of payment for services rendered as a guarantee to ensure work adheres to standards.

In fact, Roads Minister Jesmond Mugliett broached the subject in a meeting with contractors at the Westin Dragonara yesterday. Mr Mugliett called for more cooperation, particularly in the area of tender prices.

“We have pushed our costing estimates up by 25 per cent. I have tried to be up front with you, now I expect the same back. We expect the gap to be bridged,” he said. Up to only a few weeks ago, government claimed that contractors were over-tendering by up to 75 per cent in comparison to government estimates, said Mr Mugliett.

He said detailed studies had been carried out into Maltese road works practices that had been distributed to contractors in November.

“We will also try to group individual road projects together in order to reduce the overheads of working on small projects, but at the same time, I do not expect a Lm3 million contract to be awarded and to see only 12 people working. I expect at least 50 to be working on something that big,” he said.

Contractors were also given the opportunity to air their views and many asked whether the recent increases in diesel and wages was taken into account in government costing.

Another said that there was a bit of a stalemate. “You estimate aggregate (gravel mix) at Lm3, when all of us here can provide receipts to show that it costs us between Lm5.29c and Lm5.50c per measure. Wages have increased, as has diesel and the price to submit a tender,” he complained.

However, sources said that studies carried out showed that Malta had far too many aggregate producers and that the largest one was eating up the market while only operating at 40 per cent capacity. “That is a problem. But the contractors must see how they are going to sort it out,” the source said.

Another contractor said they have innumerable charges that whittle away at profits. “Excavation is paid at Lm3 per cubic metre. I have to pay Lm2.40 just to dump it. I am left with 60 per cent profit minus VAT and transport charges,” he said.

Another man brought up the aggregate issue and asked the authorities where they had found it at Lm3 per measure. “I will buy it if you tell me where you found it. I pay Lm5.50c per measure,” he said.

Another contractor also made the point that government, in drafting its estimates, was not taking into account the size of the company according to the job in hand. He said: “It can make a big difference in overheads.”

Mr Mugliett said: “We put our estimates up, but we have not seen any reciprocation from you. We are trying to draft a plan till 2012, which will mean more work for you. This plan will also be better for contractors because you will all know where you stand and what work is available.”

Mr Mugliett said that Malta had become part of the Trans European Network (TENS) which meant that the country was entitled to EU funding. “We also had the Italian Protocol funds which have allowed us to further develop our road network.”

He said that the government budgeted the protocol funds to cater for a number of projects. “We kept some money back just in case, but we did not need it so it can now be used for other projects. The network is coming together nicely,” he said.

Mr Mugliett said there were other projects in the offing. “We will be issuing a call for tenders for the St Julian’s bridge, the St Paul’s Bay bypass, various roads in Gozo, the Manoel Island-Regional Road link road, the Park-and-Ride scheme and many others,” he said.

He also said that the current crop of EU financed projects would be increased after 2006. “We will embark on more projects in 2007 once the new EU budget is concluded. But the government will make sure that roads remain a priority,” he said.

Mr Mugliett said that the government had also examined all the junctions on Route One (Hal Far to Cirkewwa) to ensure there are no deficiencies. “Where there were, we studied them and have come up with new designs to facilitate the flow of traffic. They have been submitted to the Mepa for review,” he said.

He said that some places, such as Ghadira and Xemxija, required Environmental Impact Assess- ments as they were sensitive areas.

He also said that government’s preference was to have Maltese contractors carry out the works, but with EU funds, the call

for tenders had to be made

internationally.

“I am convinced you can do it. I am trying my best to compromise. But if you keep quoting such prices, the Finance Ministry will just tell me to make alternative arrangements and you will be the losers. I am not trying to sound threatening but that is the truth. Government has tried to compromise but you must realise that we need the best possible value for money,” he said.

Mr Mugliett concluded his presentation by saying: “I am very hands-on and will find a solution. But I would rather that we find a solution together. I’d rather do it with your help. If we sit down together round the discussion table we can do it.”