PN says Enemalta should not have dropped arbitration on BWSC claims

The Opposition has accused the government of refusing to contest €9 million in claims from Danish contractor BWSC, after Enemalta and the supplier of the Delimara power station extension reached an agreement not to pursue arbitration claims in London.

Energy minister Konrad Mizzi yesterday told Parliament that Enemalta's legal consultants had warned the energy corporation it had weak grounds to pursue arbitration on the damage of a steam turbine, because it had still utilised eight other machines at the Delimara power station.

BWSC itself was also threatening Enemalta with claims on late issuance of MEPA permits and late payments.

In a statement, the PN has asked for the settlement agreement to be tabled in the House, along with documentation on the legal and technical advice submitted to Mizzi, whether the Attorney General was consulted, and why Mizzi did not allow Enemalta to independently pursue arbitration on its claims against BWSC.

"It is clear that the government has saved BWSC €9 million in claims that the corporation had, so it's legitimate to ask whose interests Labour is protecting: maybe BWSC has become part of Labour's 'Malta for all' slogan," the PN said in a swipe at the PL's meritocracy slogan that was put paid by political appointments for party volunteers, activists and other supporters.

Enemalta paid Danish contractors BWSC an extra €8 million over and above its originally stated contract price for the Delimara power station extension, without ever verifying why the company was raising its price after it had been successfully selected for the installation of its turbines.

In a ministerial statement yesterday, energy minister Konrad Mizzi revealed in parliament that BWSC had raised its original bid of €147 million to €164.9 million during tendering, to include strategic spares and a higher chimney.

Given that BWSC had already been officially selected as the winner of the tender, an agreement was carried out to halve the items added on by BWSC, namely amounting to €3 million for the chimney height and €5 million for strategic spares, which meant a final increased price of €8 million on the original BWSC bid.

"BWSC managed to charge Enemalta €8 million more for items that were not included in the original contract, and which were not even carried out," Mizzi said.

Mizzi also put paid to claims by former prime minister Lawrence Gonzi that BWSC had accepted to pay back any losses incurred in the repair of the damaged steam turbines that occurred during the testing phase for Delimara's extension in October 2012.

As it turns out, BWSC was claiming €13 million from Enemalta due to delays in issuing permits from the Malta Environment and Planning Authority, as well interest on late payments. The minister added that an alleged claim €4 million Enemalta was preparing to make against BWSC was never even submitted, because there were no legal basis for it.

Mizzi announced in parliament that both Enemalta and BWSC would cease making legal claims that were planned to take place against each other, over damages incurred in the testing phase of the steam turbines and delays in the issuing of permits to BWSC, because of the expense involved in pursuing these claims.