Enemalta told it stood to lose €2 million in pursuing BWSC claim

Pursuing a claim on steam turbine damage would have still lost Enemalta €2 million in favour of Danish contractors BWSC, legal and commercial experts told the energy corporation over pending claims the two companies were planning to pursue at the London Arbitration Centre of the International Chamber of Commerce.

MaltaToday has learnt that two separate claims that Enemalta and BWSC were planning to open against each other in London, would have left BWSC in a more favourable position to the tune of €2 million.

Energy minister Konrad Mizzi yesterday claimed Enemalta ceded an €8 million claim over steam turbine damage, after BWSC was planning to take the energy corporation for arbitration on late issuing of permits and late payments.

The news was met with opprobrium by the Opposition, which has demanded to know on what technical and legal advice had Mizzi decided to resolve the matter, by getting BWSC to drop its pretensions against Enemalta.

MaltaToday has confirmed that corporate law firm Camilleri Preziosi - which had already advised the Nationalist administration on the same matters related to Enemalta - and RSM Malta, were the government's legal and commercial advisors respectively.

The settlement agreement to drop the claims was approved by the board of directors at Enemalta.

PN statement

The Opposition accused the government of having relinquished the right to contest up to €9 million in claims from BWSC, and asked for the settlement agreement to be tabled in the House, along with documentation on the legal and technical advice submitted to Mizzi, and whether the Attorney General was consulted, as well as asking why Mizzi did not allow Enemalta to independently pursue arbitration on its claims against BWSC.

Mizzi yesterday revealed in parliament that BWSC was claiming €13 million in damages from Enemalta over delays in MEPA permits and interest on late payments.

Enemalta opted to pay €2.6 million for an extension to a BWSC warranty, leaving €10.4 million in outstanding claims, which however were then increased by a further €1.1 million in interest that BWSC demanded.

On the other hand, Enemalta made pretensions to €8.2 million in liquidated damages over the delay in the handover of the Delimara power station extension, while BWSC was seeking a total €11.5 million claim.

Enemalta was also told by legal advisors it had no legal basis for a separate €4 million claim on damages sustained on the BWSC steam turbine at Delimara, when it had to switch over to the Marsa power station.

In parliament on Tuesday, Mizzi said Enemalta was advised against the €8 million claim and another €700,000 claim on BWSC's purchase of chemicals.

In a final settlement between both sides, BWSC accepted to pay the €700,000 claim.

Mizzi also revealed that Enemalta had already paid BWSC €8 million over and above the original tender bid of €147.4 million, for spare parts and an extended chimney that were both never carried out by the Danish firm.