International Logistics Hub

The Government of Malta has announced its intention to proceed with the award of a concession whereby it will be granting a suitable site to a private economic operator under title of temporary emphyteusis. The main rationale underlying this decision is the belief that, in the hands of a private Proponent, the selected site can be optimised to take advantage of invaluable business opportunities and generate economic growth.

The PU is hereby inviting firm offers for the award of the Concession as described in the downloadable document, together with the submission of the Proposal including the Project Plan for the Concession to Design, Construct, Finance, Operate and Maintain an International Logistics Hub at Hal Far over the term of the Concession Period of sixty five (65) years on the selected site.

Scope and Nature of Concession

The Government’s vision is that an International Logistics Hub (ILH) at Hal Far will be developed on the selected site and the operations allowed will be restricted to international hubbing, and the Site must be developed, classified and maintained as either a Customs Free Zone or a Customs Warehouse.

The ILH will act as a strategic hub in the Maltese Islands for international business. It is expected that the Successful Proponent will obtain from Customs appropriate authorisations, permits or licenses to operate a Customs Free Zone or a Customs Warehouse in accordance with the relevant legislation complete with, if applicable, inventory system, proprietary software, specialised training and related procedures.

The general strategic parameters of the RFP document are defined in such a way as to allow the Proponents a fair degree of flexibility in defining and justifying their Proposal.

A major objective of the general strategic parameters of the RFP document is to ensure that the Proposal provides the best value added prospects and fosters higher human capital development leading to significant employment prospects in Malta.

Volume of the Proposed Development

 It is envisaged that the whole Site may be developed and, considering that the height above ground is capped at circa twenty five metres (25m) with an underground depth of up to circa eight metres (8m), a scenario of an absolute maximum volume of 1.48million m3 may be expected.  This is a theoretical maximum volume since there are many other considerations that would have to be taken into account by the Proponent, not least of which circulation at ground level around the building/s comprises the Facility.

 The Proponent is required to develop on the Lease Back Area, at its sole cost and expense and with no right to claim compensation and to the specifications set out in Annex XI of the RFP Document. The Lease Back Area Development is to be configured in order to generally maintain the operational requirements and practices currently in force at the Groupage Warehouse that currently operates from the Site. In the event that the Government no longer requires title to the Lease Back Area, and opts to dispose of it, the Successful Proponent will be offered the right of first refusal.

The Proponent shall have the liberty to define the combination of spaces and related sub-uses within the declared objectives of the RFP document. It is envisaged that the underground space may be used for temperature controlled storage in order to reduce the energy footprint of the facility.  Such underground space may potentially extend beneath the whole Site including beneath spaces kept free for purposes of circulation. The usable volume would also depend on the inclusion or otherwise of processing and/or packaging areas that the Proposal may include.

 The final Development, with the possibility of extending above any ground level circulation space, will contribute to the final volumetric profile of the resulting Facility.  Such configuration must provide year round shelter from the elements for docking, vehicle movements, and goods handling.

Objectives

In its consideration in awarding the Concession for the Site, the Government aims to attain the following strategic benefits from this RFP process and the eventual grant of the Concession:

1. Proactively sustain the GoM vision for the growth and development of Maltese enterprises both national and beyond our shores;
2. Offer specialised services to national and international industry;
   
3. Achieve profitable management of the Site in a manner that ensures that users and the GoM are satisfied with the level and quality of the services and facilities provided;
4. Upon the lapse of the Concession Period or earlier termination thereof, take possession of the Site as fully operational;
5. In the interest of competitiveness and long-term sustainability, the management and operation of the facilities in a lean dimension and on the basis of private sector management principles and efficient work practices;
6. Complement the facilities with the strategic commitment, vision and capability of experienced international players in order to tap new opportunities for on-going business growth; and
7. Maximize the spill-over benefits to the Maltese economy through increased investment opportunities and sustainable employment prospect.

In taking responsibility for the Site pursuant to the RFP process and the award of the Concession, the Successful Proponent shall be required to:

1. Develop and manage the Site in line with Good Industry Practise with a view to ensuring long-term sustainability;
   
2. Develop and manage the Site in compliance with all Maltese and European Community Laws including inter alia, environment and planning legislation in force at the time;
   
3. Run the Facility in compliance with relevant Maltese and international regulatory standards and in accordance with Good Industry Practise, including but not limited to environment protection, security, food standards and occupational health and safety and also to obtain the required permits from the relevant Regulatory Authority;
   
4.  The Successful Proponent shall be required to complete the Development to be carried out within the Site within thirty six (36) months to be reckoned from the date of signing the Concession Agreement(s) and shall further be required to commence the operation of the Facility immediately upon completion of the Development;
   
5. Throughout the Concession Period grant free access to representatives of GoM/ME/Regulatory Authority as the case may be for inspections of the Site both during the development and operational phases of the Concession, which inspections shall be carried in full adherence to any Applicable Law;
   
6. Develop and manage the Site with a view to ensuring its long-term sustainability within the respective market environment; and
   
7. Operate within the above-stated objectives. The Proponents’ over-arching target shall be to demonstrate its ability to achieve the best possible overall value for Malta by providing evidence of:​

• a solid financial standing to cover the investment;
• previous experience in the running of a logistics hub;
• proven capability to generate business for the hub;
• a clear investment concept/ model;
• the generation of a minimum of 400,000 cubic metres of warehousing space; and
• a significant contribution to national  Gross Value Added (GVA).​

Benefits

The Design, Construct, Finance, Operate and Maintain an International Logistics Hub at Hal Far is intended to:

1. Provide customs-related advantages as well as exemptions from Maltese and EU taxes in a controlled environment;
   
2.  Foster economic activity and employment that could occur elsewhere;
3.  Inject increased investment to industries in specialised services and generate adequate employment prospects and business opportunities; and
4.  Develop new and innovative work practices and procedures for diverse new business lines on a global basis;
5.  Yield significant & sustained economic benefits in terms of Gross Value Added (GVA) contribution, including multiplier effect on other local businesses.