Public accounts committee on fuel procurement • 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

20:54 This evening's session is over. PAC's next sitting to be announced in the coming days as the two sides have to agree on the next batch of witnesses.

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20:52 Vella's testimony is now over, bringing to an end all the witnesses who were to be summoned from the FPC and the RMC.

20:50 Vella was a member of the RMC as a representative of the Central Bank. He says, he doesn't know whether today there was such a representative on the risk management committee.

20:32 Reacting to the Auditor General's report on FOREX hedging, Vella said he deemed the comments as very positive.

He says, he never faced any political interference but said he "didn't know" when asked whether he was aware of any political interference with other members of the risk management committee.

On the now infamous Austin Gatt email regarding the hedging policy, Vella says his focus was FOREX.

20:32 Reacting to the Auditor General's report on FOREX hedging, Vella said he deemed the comments as very positive.

He says, he never faced any political interference but said he "didn't know" when asked whether he was aware of any political interference with other members of the risk management committee.

20:30 Appearing very dedicated and committed to his job, a passionate Vella speaks about how he used to constantly follow the currency market, monitoring changes and immediately calling up the Chief Financial Officer when noticing opportunities for hedging.

His passion has been noted by Fenech Adami as well, who jokingly said he "was the first witness who appeared enthusiastic to appear before the PAC".

20:15 Questioning session with Millo is over. Enters the third witness for the night, Silvio Vella. Vella was a consultant on currency hedging.

20:04 The second witness is Pauline Millo, until April a member of the Risk Management Committee.

20:00 Jason Azzopardi reads out Enemalta chairman Charles Mangion's covering letter accompanying information requested by Justyne Caruana on 28 October 2013. [refer to 19:12]

"While the Corporation's response covers meticulously the said query, such response contains information that is commercially sensitive. Publication of same is deemed to be potentially harmful to the interests of Enemalta," Mangion wrote.

"As such, while the Corporation is furnishing the [PAC] with the requested information and the reasons for Enemalta's actions during the various procurement instances, it is being proposed that such information and reasons remain in camera."

Azzopardi comments that, after having read the information provided, "there's nothing commercially sensitive".

19:52 Further questions by Fenech Adami led Grima to say that Enemalta's bank account went "marginally better" after Enemalta fined Trafigura €250,000 for breaching the contract.

According to Grima, Enemalta subsequently made a profit of a quarter of a million dollars. He said that Enemalta couldn't claim for damages, given that the average sulphur content had been 0.7%.

"Enemalta would have had no basis to claim for damages," Grima said.

19:45 In reply to questions raised by Nationalist MP Beppe Fenech Adami, Grima says that, according to EU directives, sulphur content cannot exceed 1%.

"So, the off spec consignments we had never breached these directives," Fenech Adami tells Grima, with the latter reaffirming what Fenech Adami said.

19:45 In reply to questions raised by Nationalist MP Beppe Fenech Adami, Grima says that, according to EU directives, sulphur content cannot exceed 1%.

"So, the off spec consignments we had never breached these directives," Fenech Adami tells Grima, with the latter reaffirming what Fenech Adami said.

19:30 An exasperated Caruana tells the PAC that she has had enough with "witnesses defending the breach of contract made by Trafigura".

"This attitude is irking me," she said, adding that Grima had spent "three hours defending the wrong".

19:32 An argument ensues between Grima and Justyne Caruana over Trafigura's breach of contract which Caruana argues has resulted in Enemalta forking out millions for something which was not of premium quality.

According to Caruana's calculations, between 2010 and 2011 there had 288,334 metric tones of fuel which were off specifications. The premium - additional fee to guarantee that sulphur was according to specifications - was of $5.5 per metric tonne.

"If you work it out, this amounts to millions where Enemalta paid for premium but did not get what it paid for," she said.

Grima replied that he "didn't have a calculator" to work it out after Caruana told him to do the math.

19:28 On a question raised by PAC chairman Jason Azzopardi, Peter Grima says that after Trafigura was fined €250,000 no consignments were delivered which were off specifications.

19:12 Separately, Labour MP Justyne Caruana had requested information on the number of shipments accepted by Enemalta which were off spec and which were supplied after Trafigura was fined €250,000 for providing consignments which were off specifications.

While Enemalta chairman Charles Mangion supplied the PAC with the necessary information, he requested that the information remains in camera due to commercially sensitive information included in the reply.

19:08 Meanwhile, Enemalta has replied to questions raised by Nationalist MP Beppe Fenech Adami, requesting information on the financial situation of the Malta Oil Bunkering Corporation between 2003 and 2013. Fenech Adami also requested information on when MOBC stopped registering profit and what had led to the loss.

In his reply, Enemalta CEO Louis Giordimaina provided the MOBC audited accounts between 2003 and 2010.

Audited accounts for 2011 and 2012 are not available due to the Stop Notice issued by MEPA, rendering the company non operational.

"Whilst a perusal of the submitted documents will give the reader an indication as to the financial performance of the company, in view of the fact that this subject matter is currently under investigation it is believed to be prudent on the part of the under signed not to comment in this regard," Giordimaina said in his letter to the PAC.

19:02 Grima has clarified information given on Monday evening with regard to the premium paid by Enemalta on heavy fuel oil with a 0.7% sulphur content.

While in 2012, the Trafigura contract placed this premium at $32 per metric tonne, the same premium was at $5.5 per metric tonne during 2011, i.e. the year covered by the Auditor General's report.

In 2011, a number of consignments were did no adher to the 0.7% sulphur content specifications, at times going up to almost 1%.

18:43 Good evening and welcome to today's session of the Public Accounts Committee. Session is set to start soon.

Peter Grima, Enemalta's head of generation, last week said that Enemalta had no option but to accept four consignments of fuel oil with higher sulphur content than specified in the tenders.