Tumas & Gasan win bid for new gas powerstation

Electro Gas Malta, represented by local companies Gasan and Tumas Group, was chosen as the preferred bidder for the government's power purchase and gas supply agreement.

The consortium will build a new power station run on gas and be responsible for the gas supply infrastructure.

The consortium includes the German giant company Siemens as lead developer, which will invest around 20% of the project costs.

The consortium is also made up of Gasol PLC as lead member, African established company SOCAR Trading for gas trading, and GEM Holdings as an equity member made up of locally established companies including Gasan and Tumas Group of companies.

The two other bidders, Yildirim Technicas and Endeavor BB Energy, failed to make the bar with Yildirim Technicas failing at the very first stage of the bidding process.

The evaluation process was divided in four stages: administrative competences, minimum requirements, additional requirements and financial evaluation. The first two stages had a clear pass or fail, while the third and fourth stages carried a 20% and 80% scoring structure. The selected preferred bidder placed first in both third and fourth stages.

Addressing a press conference at the Mediterranean Conference Centre, Energy Minister Konrad Mizzi said Malta was not accustomed to a selection process of this level.

“The project management of the selection process was unprecedented and never seen under previous PN administrations. Electro Gas is truly a world-class bidder, combining foreign expertise and local investment,” Mizzi said. 

The minister said the bidder will sign a 15-year agreement and provide a fixed price for five years. The price will then be revised accordingly, “but will still be cheaper than the price offered by oil-powered plants.” The price will be revealed after an eventual appeal process is over.

He said he was very satisfied with the outcome and that this agreement will ensure the promised 25% decrease in electricity tariffs in March 2014.

The selection of the preferred bidder came after the establishing of Malta Power Gas Ltd, which applied for the necessary permits and will now be transferred to the selected bidder for €30 million.

“This was more than the amount needed to make feasible the reduction of utility tariffs from next March,” Mizzi said.

The price does not include the renting of public land, which will be rented to the bidder on commercial rates. 

The chosen consortium opted for a 126,000 cubic metres of storage, a third less than the 180,000 outlined in the permit. This will entail 10 to 12 annual shipments of supply.

Konrad Mizzi announced that some Enemalta employees will be seconded to the chosen bidder, and will undertake training where necessary. However, new employees will be absorbed by the consortium.

The process started on 10^th April when an expression of interest was issued. From the initial 19 applicants, 11 were shortlisted for the request for proposal in early July.