HM Government of Gibraltar notes the Principal Auditor’s comments on the procurement process relating to the Northern Defences project. The Government takes this opportunity to set the record straight and provide the full context, much of which was made available to the Auditor during the course of his enquiries but has not been reflected in his report.

The following facts outline the reality of the project and the procurement process followed:

• The Northern Defences contract was not a bypassing of procurement rules. It was awarded following a competitive and public Expression of Interest (EOI) process, which is a valid form of procurement for complex or undefined projects.

• This was the fourth public EOI issued for the site, all of which were widely advertised. The current approach is consistent with past practice and has never previously been criticised by the Principal Auditor.

• The use of an EOI was necessary because the nature of the site made it impossible to produce detailed tender specifications. The Northern Defences is a historic, overgrown, and structurally complex area where a traditional tender format would have been unworkable.

• Only one submission met the Government’s requirements. Proposals were received from MH Bland, Gib Tours, and Fortress Attractions Ltd. Only the proposal by Fortress Attractions Ltd delivered on all required conditions, including the integration of heritage, tourism, recreation, and educational elements.

• A panel of experts evaluated the proposals. This included senior civil servants, technical advisors and Government Ministers:

  • Town Planning Department (P. Naughton Rumbo)

  • Land Property Services (A. Brittenden)

  • Ministry for Heritage (D. Lopez)

  • Government Projects Director (C. Viagas)

  • Minister for Lands (Hon. Dr. Garcia)

  • Minister for Environment and Heritage (Hon. Dr. Cortes)

  • Minister for Tourism (Hon. C. Santos)

  • CEO, Technical Services (E. Hermida)

• The EOI required applicants to meet wide-ranging expectations, including:

  • Investment in site upgrades and heritage conservation

  • Delivery of recreational and educational services

  • Employment and training opportunities

  • Payment of a premium and monthly fee

• The outcome of this EOI was publicly welcomed by the Gibraltar Heritage Trust in 2024 as a “seminal leap forward,” a significant endorsement of the heritage value of the project.

• The chosen proposal does not involve public expenditure. The site will be restored and operated through private investment, with no financial outlay required from the taxpayer. The private operator has committed to an investment of approximately £4 million.

• The actual economic terms of the agreement with Fortress Attractions Ltd are as follows:

  • After an initial period of 18 months, FAL will pay to HMGoG the higher of 25% of the profits generated from ticket and merchandising sales, or an annual fee of £50,000 per annum until 30th June 2027.

  • After the 30th of June, FAL will pay HMGoG the higher of 25% of the profits generated or an annual fee of £100,000 per annum.

• The contract is non-exclusive and the Government retains full ownership of the site. The operator only holds a licence to operate services.

• The process was transparently conducted from the outset. The Expression of Interest was publicly launched on the Land Property Services website in 2022 and was explicitly referenced by the Deputy Chief Minister in Parliament during his 2024 Budget Address.

• The Principal Auditor’s concern focuses on the absence of a VEAT notice, a procedural document used to justify direct awards in some cases. However:

  • A VEAT notice was not previously raised as a requirement in any of the four EOIs for this site

  • The contract value is not fully quantifiable at this stage, and therefore legal thresholds cannot be definitively established

  • No prior objection had been raised to the use of EOIs in this context, and the process had full public visibility

• The Procurement Office was not involved, as the Government determined that a prescriptive tender was not appropriate. This was communicated to the Auditor, along with the reasons. No formal objection from Procurement has been received by the department responsible.

• The Principal Auditor states that his concern relates only to process, yet he includes this matter in a Value for Money audit, which should assess outcomes, not procedural technicalities. If the outcome is a cost-free, revenue-generating, heritage-enhancing public project, its inclusion in this section of the report appears not only misplaced but raises serious questions about the Principal Auditor's intent and whether there was an effort to unfairly cast suspicion on a transparently managed and fully disclosed process.

• The Auditor’s framing of this issue closely mirrors political lines raised by Opposition MP Damon Bossino during the same period audit questions were underway. These points were addressed in Parliament and by press release, but appear to have been disregarded in the final report.

• All relevant documentation was made available to the Principal Auditor, including access to the original bids, which contain commercially sensitive information.

• The Northern Defences project is a carefully negotiated initiative that delivers good value for the taxpayer. It improves our touristic product, restores a historic asset, and supports community use, all without a single pound of public investment. The Government regrets that this context has been omitted from the Auditor’s report and reiterates its full confidence in the process that was followed.

ENDS