[WATCH] 'Not fuel committee's practice to keep minutes of meetings' - Tranter • live blog

Welcome to MaltaToday's live blog of the PAC hearing into the Auditor General's audit of Enemalta's fuel procurement policy

EXPLAINER | Auditor General's report on Enemalta fuel procurement

20:37 Thank you for following us... and good night.

20:35 Meeting adjourned to Monday 16 September from 9:30am to 1:30pm; Thursday from 9am to 12pm and Friday from 5pm till 7pm.

20:32 They appear to have a very busy schedule... still waiting to set dates.

20:28 Hearing with Alex Tranter ends here. PAC to decide on next meeting.

20:15 Back to Total purchasing 66% of SunPower in 2011. Tranter says when he was employed with SunRay - subsequently purchased by SunPower - he was not aware of Total's plan. He says he held no conflict of interest because SunRay was an energy producer but developed photovoltaic projects.

20:07 As Justyne Caruana points out the Auditor General's report was very damning of Enemalta during his chairmanship, Tranter says the report is not named 'an analysis of the effectiveness of Alex Tranter'. But when Caruana points out that he doesn't appear to have been affected by the report, Tranter goes on the defensive.

"It doesn't mean that this report never affected me, or that I was comfortbale with me not being able to talk about it. It cast a doubt on many people who gave alot of their time to Enemalta, work which we did in the best interest of Enemalta. I respect the recommendations. Enemalta has evolved, and yes more evolution is needed. If I appear relaxed doesn't mean I'm comfortable. Because I am highly uncomfortable with this report," Tranter says.

19:49 Tranter insistingly repeats he never held meetings with Frank Sammut, "ever". "I was never in contact with Frank Sammut," he says.

The lack of minutes however should not be used to shed doubt on the contracts awarded. "Details in the sealed envelopes are enough to give sufficient explanation," Tanter says.

He also says there was nothing suspicious in Totsa frequently being awarded contracts because "they would be the best and cheapest offer".

He however admitted that he found it "strange" that big companies such as BP were not interested in the Maltese market. "For these big suppliers, Malta appeared like a small market. But what we wanted is for Enemalta to have an increased list of suppliers from which to choose."

19:44 No exit meetings were held when Alex Tranter took over the chairmanship of Enemalta from Tancred Tabone. Totsa was a major supplier of Enemalta and a cordial relationshp existed. In meetings with a TOTSA representative, Tranter always took with him an Enemalta official.

On Trafigura, Tranter says Trafigura were already suppliers. They didn't remain suppliers because of "certain problems" and Trafigura featured again near the end of his period. He says he never heard anything about Trafigura unti the scandal was revealed in the papers.

Tim Waters, Trafigura representative, also met Tranter. Tranter says he met him, just like he had met all other suppliers' representatives. "It was a practice and part of the relationship between a supplier and a client."

19:38 Jason Azzopardi intervenes because the government side is asking questions relating to pre-2008. But Bonnici says it is relevant because it is about fuel procurement, where the majority of fuel procured is for HFO.

A tiff ensues between the two sides after Bonnici refers to the PN election loss analysis and has apparently hit a sore spot, with Azzopardi saying "this is a parliamentary committee not a band club meeting".

Azzopardi turns to the Auditor General and, sarcastically, asks him whether he referred to the PN report during the compilation of his report.

Bonnici says his questions were relevant, because as the PN report showed, the citizens were asking how none of the authorities were aware of the Enemalta oil scandal.

19:27 Bonnici and Tranter locked in an argument with Bonnici insisting that if the Nationalist administration had gone for gas instead of HFO, Malta would have not undergone the crisis. Tranter however adds that he was proud to be the chairman who had introduced a long-term generation plan. Tranter had declared a policy to go for gas, but he couldn't still implement it. "In 2007 and 2008, when the crisis erupted, it would have been impossible to switch to gas," Tranter insists.

"The price of oil affects everything... from gas to the foreign exchange."

The circumstances of the policy document we did refers to gas and the infrastructure to import gas. It is a complete change, not simply by changing tanker but the whole infrastructure. The government of the time, Tranter explains, considered gas, interconnector. "During those times, the two choices considering the circumstances were the interconnector and the change to gas. Malta took a decision to go for interconnector and the gas option was never eliminated. I am also proud that the choice to go for interconnector was carried under my chairmanship," Tranter says.

Are you proud of developing BWSC plant? Bonnici asks.

"The HFO plant is being fired in the most efficient way which this country has ever seen. I am proud of the decisions taken. The choice of gas was never eliminated." Tranter repeats BWSC plant is the most efficient plant, where emissions respect EU emission directives.

The final price which is paid by consumers, is the cheapest price produced by Enemalta according to Tranter.

19:19 Tranter says certain appointments to Enemalta were sometimes head-hunting other times through open call. People would be appointed on consultation with chairman, Tranter says not sure whether Enemalta board was involved, and ministry.

He also denies the email flagged by the Auditor General as "political interference".

"Enemalta was under siege. We had to report, we had committees, even with MCESD, on a crisis situation which with the increasing price of oil in 2007 we were under constant pressure as it affected the tariffs."

Tranter says what happens in price of oil affects the price of gas.

19:05 Tranter says there were circumstances where supplier would come with a different SPEC or who would have not delivered on time. He remembers one case where Trafigura would have a consignment problem. This wouldn't mean not awarding it a tender because it would still remain the cheapest bid but remind it of the previous problem faced. He adds this had been a rare exception.

19:04 Tranter says tender documents and specification were an "improvement" over the procedure he inherited.

18:52 The head of petroleum division would send the tender document to the list of suppliers. During Tranter's chairmanship, the bids would be received either on fax or email at his PA's office.

Tranter is trying to remember the names of the three personal assistants he had... He breathes a sigh of relief when he manages to remember the women's names.

Apparently, only the personal assistant had access to those emails. "The PA would pay attention to note that an email's heading would be 'Bids' and make sure to print them," he adds.

Tranter doesn't know the length of period during which the bids would be received.

"That was the role of the functionary," he adds. However, they would bid at the last minute because of the market's high volatily.

Tranter admits that the 2011 policy - with the MITA password obtained during the FPC meetings to access bids - was "an improvement".

18:46 The FPC received, analysed and awarded tenders. Members of the committee included technical experts for the specification of fuel. As engineer, Tranter needed the help of either the head of petroleum division of head of LPG, depending on the fuel purchased. These two would have the knowledge of the specifications required. The technical aspect was in the hands of these two: Philip Borg on fuel purchases and Mario Magri on LPG.

Tranter's function was to make sure that all bids were analysed, that fuel was purchased according to specification and on best price.

"I would negotiate with my counterpart, during a conference call which all FPC members would hear," Tranter says.

18:35 Tranter says that fuel oil is used by small island states. Countries who had diesel engines of fuel oil. It was an option to generate energy. Bonnici asks whether fuel oil is mostly used by merchantile vessels. Tranter says he has no such knowledge, but agrees that vessels mostly use fuel oil. But what makes it different is the sulphur content. He adds that the use of fuel oil is decreasing.

Fuel oil is the biggest volume as fuel which Enemalta purchases. But Enemalta also purchases other types of fuel.

18:26 Tranter says that late 2009 and early 2010 he started getting involved in energy sector. He had directorship involvement in solar energy plants, SunRay Italy SRA which was subsequently purchased by American SunPower corporation. Tranter says he was not aware SunPower was interested in SunRay when he started working with them. Total took a 60% stake in SunPower. He says there was a government tender which SunPower entered in consortium but the tender had been awarded to another consortium.

In Malta he was director of SunRay Malta and in Italy he became CEO of SunRay Italy.

Tranter was also chairman of MOBC when he was appointed chairman of Enemalta. MOBC now had become a storage terminal. Tranter says he has no opinion on why government had decided to remove MOBC of its bunkering services. Asked whether he agreed with that, Tranter says he had no information on the decision taken, since it was before his time. "I prefer not saying anything because I have no background information," he adds.

"I inherited MOBC as a storage terminal. There was a vision for MOBC to form part of a privatisation division in petroleum."

Tranter then adds he "doesn't have knowledge of bunkering".

18:23 Bonnici challenges the 'non executive' part of Tranter's title, but the former Enemalta Non-Executive Chaiman explains that the title meant he was not a full time chairman but acted as a visiting chairman which only works when the need arises.

18:20 Bonnici asks Tranter how he became Chairman, and Tranter replies he studied as a mechanical engineer and was sponsored by Enemalta. "Enemalta thought me alot and I am grateful". Later he worked as CEO in the health sector and on 1 July 2005 former Minister Austin Gatt asked him to accept the post of Chairman. "This came as a surprise to me" tranter said, however he confirmed Bonnici's claims that Gatt was related to Tranter through his wife's side

18:10 Quotes from an email which Pippo Pandolfino sent on diesel adjudication contract listing bidders and the initial offers made by TOTSA and the negotiated offer. It is being used as an example of the email exchanges which Tranter referred to earlier.

Bonnici argues that it was the FPC's role to obtain the best negotiable price.

18:00 "It's elementary to take notes," Bonnici tells Tranter, to which Tranter replies that he "couldn't accept" it. He reiterates minute-taking was not part of the practice.

"My boss was the minister. Things related to risk management and fuel procurement, I used to refer to minister and Enemalta board. Through emails I would inform him of who won and decision taken. In hindsight, I now think I should have included that information in the sealed envelope," Tranter says.

So, basically, the FPC wouldn't retain minutes on decision taken but then an email would be sent to the "boss" [the minister], copied also CFO and the CEO, recording the decision. The emails would be sent "occassionally" when big tenders would be awarded.

17:52 Referring to the minutes kept in 2011, Tranter said the procedure was the same as adopted during his chairmanship.

Bonnici however insists that with the lack of records, the PAC members had nothing by which they could confirm what Tranter was saying. Luciano Busuttil asks whether he felt that minutes should have been taken.

Tranter replies that the use of minutes "will not fight corruption... Minutes list what happens. Undoubtedly, minutes were not kept but it was a practice I inherited".

Tranter adds that with hindsight, many things could have been different. "But Enemalta's practices that time, even within other tender adjudication committees, no minutes were taken."

17:48 REVEALED: why minutes were not kept. According to Tranter, the bidders' prices were information of such commerical and sensitive nature that for this reason no minutes were kept.

17:40 In reply to the government side's questions, Tranter repeates he inherited the procedure "used before I was appointed non executive chairman".

Refers to April 2005 email from George Farrugia to Totsa. Bonnici says "we have lack of proper record keeping", how can Tranter reassure the people that contract awarded were of integrity.

Tranter says that the email was sent before his appointment but insists that TOTSA had always submitted the cheapest bid.

"But you have hit the nail on its head on the sensitivity of these meetings. And the way we operated is that phone calls were prohibited and that people never left the meeting," Tranter says.

Bonnici asks "how can we know that this is true?"

"Because I'm here before you saying so," Tranter replies.

17:27 On to receiving bids via email, Tranter explains they used to receive bids via fax and email. Office of the chairman does not "physically" refer to the chairman's office but to the chairman's team of workers, in Tranter's case his personal assistant. Then came the "evolution" where MITA introduced an email account and password moving away from the use of fax.

17:22 Tranter says that before Pippo Pandolfino as CFO, there was Tarcisio Mifsud as Manager Finance. The government side is arguing that 18 December 2003 was the last time that minutes were taken. After that, 2004, not only was the procedure changed but it also happens to be the same year when the Enemalta oil kickbacks took place. Parliamentary secretary Owen Bonnici says he was making a point that the procedure had in fact changed.

17:11 woops.. Beppe Fenech Adami confuses Totsa with "tosta". He asks Tranter how TOTSA had won a contract without having even tendered. The contract was awarded in 2004 and the case was revealed in court during the compilation of evidence in the Enemalta oil scandal case. Tranter was appointed non executive chairman in 2005.

"I am not aware of this," Tranter says.

On why tenders were awarded to companies which were not necessarily the cheapest bids, Tranter says there were other factors which affected the final decision. The price on itself was not enough and issues of fuel quality and security of supply where two determining factors.

"However, I insist that our hedging systems have always been favourable to Enemalta and FPC managed to save millions in negotiations. TOTSA was the cheapest every time it won the tender and FPC had even managed to bring down the prices even more."

17:04 Asked whether he "inherited Tabone's procedure", Tranter says he "objects" to describing it as "Tancred Tabone's" because it was "Enemalta's procedure".

Owen Bonnici however comments that the procedure used by Robert Ghirlando, Enemalta CEO before Tancred Tabone, was different.

Tranter is now handling a presentation made to MCESD in 2008, an update on Enemalta's hedging strategy.

Fuel procurement advisory committee (FPAC) 1 focused more on fuel procurement, Tranter says, while FPAC 2 focused more on hedging. Tranter emphasises that hedging was still fuel procurement but "on paper". In this sense, fuel procurement refers to the "physcial" purchasing of oil.

16:57 In the 2008 dossier, then Enemalta CEO David Spiteri Gingell writes about "political interference". According to Tranter this interference referred to the ministry's decision [Austin Gatt's] to oppose Enemalta's requests to employ more professionals and offer better working conditions at Enemalta. Tranter doesn't know why the ministry had opposed this suggestion, but says that Enemalta was finding it difficult to attract professionals.

Back to the 2011 document, he says "it is a procedure not a policy". The NAO referred to it as "policy" in its report.

16:41 Now refers to the 2008 Enemalta dossier which he described as "election dossier". It was prepared on Enemalta's own initiative just in case there would be a change in ministerial responsibility, Tranter says.

Auditor General intervenes to say that Office of the Prime Minister had issued a directive to all entities to issue such a dossier.

"This dossier gives a crystal clear picture of Enemalta in 2008 which includes recommendations and criticism," Tranter adds.

He also says the dossier was tabled in parliament - the MPs are now confused.

There appears to be a little mix-up: the document which Tranter says can be found online - to a certain extent true - is a 130-page document. But the dossier Tranter has in hand is at least 500-pages thick. He now says the dossier he brought with him is his.

16:32 Tranter insists there was a policy and adds he had "a number of versions".

He refers to the 2011 policy document (Tranter resigned in 2010) and says it is "a good procedure document". He says that the procedure described in the 2011 document, was the same procedure adopted by him.

"I adopted a procedure which was used by the previous committee. However, during my tenure, four CEOs and two CFOs were changed."

In chronological order the four CEOs were Ray Attard, Anthony Rizzo, David Spiteri Gingell and Karl Camilleri.

16:24 Tranter, who repeatedly stated he was a non-executive chairman, says he "inherited" a system where no minutes were taken but the practice was for the Chief Financial Officer to take notes during the meetings. He also says that all committee decision would be communicated to the Ministry in charge of Enemalta.

Pressed by MP Jason Azzopardi, Tranter says the scribbled minutes "are not minutes" but notes taken by the CFO (Pippo Pandolfino).

"I cannot understand who said those are minutes. Such interpretation is embarrassing," he adds. He says difference in the format was due to change in CFO - the first one was Pippo Pandolfino while the second was Antoine Galea - the current CFO. (the scribbled minutes were Pandolfino's; the second sample belonged to Galea).

"When [Antoine Galea] was appointed, he wanted to include guidelines. Pandolfino knew the guidelines off the top of his head, while Galea wanted to prepare a spreadsheet," Tranter adds.

He says no minutes were taken but a tender adjudication sheet was kept.

16:11 Tranter is reading out his statement. He insists all decisions were unanimous and signed by all FPC members. "There was no chairman domain. I used to chair the meetings but decisions were taken by all of us," he says.

16:06 Tranter was appointed non-executive chairman on 1 July 2005. On 4 March 2010, he informed finance minister Tonio Fenech that he would resign his post as non executive chairman since he took a post abroad. He officially ended his role on 31 May 2010.

Local reports said that fuel procurement was the "domain" of the Enemalta chairman and that his office used "to call the shots". Tranter has asked the committee members whether they were aware of the statement he submitted to the Auditor General. He also says Enemalta and Auditor General never approached him during the compilation of the audit report. On 23 July, 2013, he gave a statement to the Auditor General.

16:04 Good afternoon. We're live from the public accounts committee on the Auditor General's report. First witness is former Enemalta chairman Alex Tranter, Tancred Tabone's successor, appointed by then Nationalist Minister Austin Gatt.

First questions by the Opposition.