Ex-Enemalta chairman unaware of Gasol financial trouble when ratifying Electrogas contract

Former Enemalta chairman Charles Mangion has told parliament’s public accounts committee that he was not made aware of Gasol’s financial struggles when he ratified the decision to award the power station contract to the Electrogas consortium.

During his testimony before the committee on Thursday morning, Mangion insisted that his role as chairman of the Enemalta board was merely to ratify the decision to award the contract to Electrogas, a decision that was recommended by the tender evaluation committee.

When prompted on Gasol’s poor financial standing at the time of the bid, Mangion said that he was not aware of the company’s financial troubles, nor of Socar’s willingness to mitigate this risk, at the time of the ratification.

Gasol had been struck off from the Electrogas consortium two years after the consortium was selected as the preferred bidder to build a new gas power station and supply electricity to Enemalta.

In its investigation into the Electrogas contract, the National Audit Office noted that issues flagged by the evaluation committee with Gasol, the lead partner in the consortium, were dismissed.

However, the evaluation committee eventually ruled Electrogas as admissible because Gasol was not deemed to be important to the commercial and technical aspects of the bid.

Furthermore, the Azerbaijani State company Socar Trading had provided a letter of commitment to cover the equity contribution of Gasol.

The NAO had noted that Socar Trading’s willingness to mitigate the risk raised further doubt as to the utility of Gasol plc as the lead member of the Electrogas consortium.

Mangion said he was of the opinion that Gasol’s financial standing would not have been an issue given Socar’s involvement in the consortium and it’s willingness to make good the losses.

However, he eventually said that he was only made aware of this situation after ratifying the decision to award the tender to Electrogas.

Indeed, he was also not made aware of changes to certain provisions that manipulated the nature of the tender.

After Mangion, former Enemalta CEO Louis Giordamaina testified briefly on two meetings held at Castille days before Electrogas was announced as the preferred bidder.

He said that, at the first meeting, it had been decided by the evaluation committee to recommend Electrogas as the preferred bidder. The committee also decided to go public on the decision, all before Enemalta ratified the decision.

In the second meeting, held a day after the first, the board of directors ratified the decision. Giordimaina said Mangion was tasked with calling Konrad Mizzi, who was the minister tasked with overseeing the project, to inform him of the decision.