PAC | Opposition broadens witness list over Delimara Power Station contract

During the PAC sitting on Tuesday evening, both government and the opposition presented comprehensive yet non-exclusive lists of possible witnesses after witnesses from the office of the Auditor General were asked a series of questions by both Government and Opposition MPs on their investigation’s findings.

Labour MP Evarist Bartolo raised concerns regarding how government had opted to have costings calculated on a basis of 10, and not 20 or 30 – which he maintained accurately reflected a lifetime of an energy generation plant. He maintained that in the long run, a diesel plant would have been cheaper and the heavy fuel option opted for by government.  The Auditor General however refrained from commenting on policy decisions.

Bartolo added that he did not also understand how the maintenance costs proposed by BSWC could have been so lo – adding that these figures are unrealistic. The Auditor General’s office confirmed that the figures were only speculative, and affirmed that they were not only likely, but certainly to be higher.

Here, Gatt intertervened to remark that it was “ironic” the Opposition was complaining that government had managed to negotiated low maintenance costs, to which Bartolo replied sardonically “if only they’ll turn out to be that low.”

Bartolo also made the point that gas would have been a far cheaper technological option, especially when one considers that €27 million would be needed to eventually convert the plant to gas.

Finance Minister Tonio Fenech interjected to point out that the gas option nevertheless remained, and that BSWC’s choice was nevertheless the cheaper one. He called on the Auditor General to confirm this point, who said that there were no figures that showed that heavy fuel oil technology would be cheaper that gas because both Bateman’s bid and BSWC’s bid were considered on diesel technology terms.

Bartolo also pointed to a dossier Enemalta prepared on the eve of the 2008m election that confirmed that gas was the only realistic option if Malta wanted to meet requirements laid down in environmental legislation in the cheapest and most cost-effective way possible.

“Was the cabinet who approved it at the time stupid?” Bartolo queried. Gatt rebutted these claims, explaining that government’s had opted for an energy policy that allowed the country to convert to gas whenever it wanted. “Should the country opt to develop expensive gas technology, or should it invest in an interconnector that will open up opportunities for Malta to buy gas-generated energy from Europe? Gatt asked.

He also pointed out that Malta has no natural resources of gas, and what market it could hope to establish was limited due to its size. He said that while countries abroad were in a position to acquire gas on advantageous terms, the same could not be said for Malta.

Later, the government and the opposition both presented comprehensive lists of possible witnesses after Infrastructure Minister Austin Gatt presented a motion at the end of a debate.

Gatt's reiterated that during the debate, no evidence of corruption, trading of influence or insider information had been found by the Auditor General. He also said that that BSWC’s bid was €296 million cheaper than other bids, and the chosen plant could in future be converted to natural gas.

Gatt claimed that the debate had also confirmed that emission levels that the selected plant conformed to would be the same as those applicable in Germany.

However, Gatt maintained, despite the cooperation of the Auditor-General, more remained to be revealed on particular points. Among these points, Gatt mentioned the alleged links between bidder Bateman and the Labour Party, claims that Bateman had insider information, and conflicting statements between BWSC representative Joe Mizzi and his former employer.

Notably, Gatt said that since the evidence could have juridical repercussions it was also being proposed that the procedure to be adopted by the committee would first be discussed and agreed by the House Business Committee.

Gatt quantified these concerns by saying that after reviewing Erksin May (an authoritative text on parliamentary procedure), he said that witnesses were a very complicated issue and that it was not clear, for example, whether those giving incriminating evidence before the PAC would be immune from legal persecution.

The motion will be discussed at another sitting, and the PAC was adjourned until 31 January.

The government’s list of witnesses includes David Spiteri Gingell, Alex Tranter, Joe Mizzi and other former and current Enemalta officials, along with members of the various adjudication boards, BWSC representatives, members of the Contracts Committee, and the head of the environment section at Mepa, among others.

Gatt said that on the list were also the two people who the opposition claimed to have passed on sensitive information to BWSC representative Joseph Mizzi, the names of which he did not know.

The list also includes representatives of Lehmeyer International, the representative of Bateman – who Gatt jocularly remarked that did not need to be named - and other government officials.

The Opposition’s list – while sharing many names present on government’s list - also included Gatt himself, Malta's permanent representative to the EU Richard Cachia Caruana, John Dalli, Joe Saliba, Jesmond Mugliett, contractor Nazzareno Vassallo, Proffessor Edward Mallia, Michael Fenech Adami, and various officials and policy advisors at Gatt's ministry.

Letter from PL MP Evarist Bartolo to PAC Chairman Charles Mangion – Call to Auditor General to re-open investigation

At the opening of the sitting, Mangion presented a letter he had received from Evarist Bartolo. In this letter, Bartolo requested that the Auditor-General re-open the Delimara power station extension contract in the light of new information that had surfaced since the investigation was concluded and his report presented.

In the letter, Bartolo maintained that Mitsui Engineering owned BWSC, while MANN, which placed second in the tendering process, had been in possession of a licence to construct BWSC engines since 1926.

Bartolo pointed out that BWSC and MANN had a history of working together and maintained that Mitsui would therefore have benefited irrespective of whether it was BWSC or MANN who won the tender.

Bartolo also said out that Enemalta had also signed an agreement with Sumimoto Mitsui for a € 210 million loan, adding that audit and advisory group KPMG, used by BWSC and Sumimoto Mitsui Banking Corporation (SMBC), was also engaged by Enemalta to submit a report on the power tariffs.

In his letter, Bartolo also observed that various overseas sub-contractors engaged by BWSC were involved in corruption and money laundering cases abroad which have not been declared.

The letter provoked sporadic reactions from Infrastructure Minister Ausitin Gatt who at times rolled his eyes or appeared to snort in silent derision – particularly when Bartolo’s letter pointed out that one of BSWC’s sub-contractors, Vassallo Builders, also built the PN headquarters and employed the Enemalta chairman in one of its subsidiary companies.

In reaction Gatt maintained the letter should be discussed during the next meeting, a position that the chairman echoed.