Spiteri Gingell ‘no gospel’ on management issues – Tonio Fenech on PAC testimony

Former Enemalta CEO David Spiteri Gingell chose to turn the spotlight onto the Finance Ministry instead of taking responsibility for the operations of the fuel procurement committee under his chairmanship, former Finance Minister Tonio Fenech has claimed.

Reacting to Spiteri Gingell's surprising comments during Monday's Public Accounts Committee, Fenech lambasted Spiteri Gingell for blaming him for his abrupt resignation when the former CEO "should have been answering questions on the committee's modus operandi".

"It was clear that Spiteri Gingell tried to hide his misgivings by shifting the attention onto the Ministry for Finance," Fenech told MaltaToday.

"He never declared whether he felt the FPC's operations were satisfying or not. He only had one simple question to answer but didn't."

Comparing Spiteri Gingell's hearing to another former chairman, Edmund Gatt Baldachino, Fenech noted that the latter had felt there was something which had to be improved within the fuel procurement committee and requested an audit to be carried out.

"Not the same could be said about Spiteri Gingell," Fenech commented.

Spiteri Gingell, who served as the state utility's CEO between July 2007 and June 2008, was the third witness to appear before the Public Accounts Committee discussing the Auditor General's findings into Enemalta's fuel procurement between 2008 and mid-2011.

But before the PAC members could start questioning him, Spiteri Gingell said he wanted to make a declaration: he revealed the clashes he had had with Tonio Fenech - both as parliamentary secretary in 2007 and finance minister in 2008 - while trying to carry out an overhaul of Enemalta's management infrastructure.

Spiteri Gingell was headhunted by former Investments Minister Austin Gatt to head Enemalta Corporation. Spiteri Gingell said he accepted on the premise that he would be allowed to do all it took to implement the necessary changes.

But as months passed, the former CEO complained that he could not implement change because "decisions were being taken from South Street [the Finance Ministry], who in their wisdom were not seeing the gravity of the problem".

The bone of contention lay in the management infrastructure that Spiteri Gingell wanted to strengthen, but which he claims found resistance from the Finance Ministry. Fenech in turn said that Spiteri Gingell's plan was to appoint 45 managers, which alone would have cost some €5.5 million. "This didn't even include the secretaries to assist the managers. There was nothing in the plan related to the fuel procurement committee, and there was nothing in it which would have explained how the substantial investment would have been beneficial for Enemalta."

Fenech described Spiteri Gingell as thinking he was the "gospel" on management issues.

"He is not a gospel... how did he think we were going to finance their salaries? By increasing the utility bills? I am a person used to carrying my responsibility."

According to Tonio Fenech, Spiteri Gingell's "problem was that he couldn't understand that it was the Finance Ministry who had the final say on recruitment issues and not any CEO."

The Finance Ministry's final say on recruitment issues of every public entity was an OPM directive in order to control government costs, Fenech said.

"The only decision taken by South Street was related to recruitment. It was a clear directive that all ministries and entities had to adhere to... something that even Austin Gatt understood and followed.

"Spiteri Gingell thought that any decisions on Enemalta should be taken by the corporation and he would shoulder responsibility for it. But no one turns to the CEO if utility bills increase, but to the responsible minister. He was more willing to resign than to accept this reality."

Fenech went on to explain that Spiteri Gingell's costly proposal came when Malta was in the process of entering the eurozone, with the paramount criterion being the reduction of the deficit to under 3%, as per Maastricht.

"Enemalta's financial situation was definitely not helping to reach this objective, and tough decisions such as increasing the surcharge had to be taken. At the same time, government had increased its subvention to almost €50 million a year. If Spiteri Gingell thinks I was not aware of the dire situation, he is wrong."

The former finance minister insisted that the management design as presented by the then-Enemalta CEO was "an exaggerated structure".

"In the absence of a detailed report on how this structure would help Enemalta, the Finance Ministry had to carry out its evaluation. Meetings were held with the permanent secretary and the budget office, and all concluded that the request was overboard and requested a revised plan," Fenech said.

He added that at that point, Spiteri Gingell turned to Austin Gatt, who in turn asked Tonio Fenech whether he could see to the matter.

"I read the report and agreed it was exaggerated. I stand by the decision taken by the Finance Ministry, and Spiteri Gingell took offense when we sent our proposals. He turned to Gatt and threatened that if his plan wasn't approved, he would resign... Gatt stood by our decision."

Fenech insisted that it was the Finance Ministry's responsibility to see that the country kept to its financial targets.

"It was part of my daily job to be the bad guy and inform CEOs it was impossible to give them everything. Spiteri Gingell couldn't understand that Enemalta was a public corporation under government's responsibility and not some company left to him by his grandparents."

Pressing on the "exaggerated plan", Fenech even said that the revised management plan as proposed by the Finance Ministry was felt to be "too heavy" by current Enemalta CEO Louis Giordimaina.

"Just imagine if we had implemented the one proposed by Spiteri Gingell."