Updated | Muscat insists NAO report shows tender shortcomings had no bearing on Electrogas choice

The government and Opposition went head to head in Parliament on the National Audit Office’s report on the Electrogas deal this evening, with the Prime Minister insisting the findings showed that Electrogas would have been chosen as the contractor regardless of any other tendering shortcomings.

Opening the discussion, Opposition leader Adrian Delia said the 593-page report went into detail about all the steps involved in the power station deal.

“It should be the government’s intention to choose that which is best for Malta, at the most favourable price. The government employs people to make these choices - evaluation committees which have to decide what is best for Malta.”

But the government’s intention was clear from the outset, he said, as he emphasised that people chosen to head the evaluation committee where Nexia BT, lead by Brian Tonna, the same accountant who was delegated by Tourism Minister Konrad Mizzi to open a Panama account for him.

"So the government chose this person to decide who would be taking the power station contract."

Opposition leader Adrian Delia

The offer chosen by the government was almost identical in its nature to what the Labour Party had suggested as a project for the power station before the election, Delia underscored.

"Eventually the government had to issue a bank guarantee of €360 million to Electrogas for the project - this was of great concern to the Auditor General, as shown in the report."

The government, however, is not saying the truth, and is ignoring the findings of the report, he emphasised, as he read through various key sections of the report."

“The report says none of the tender submissions were fully compliant. But some of the candidates didn’t have the government on their side, while others had all the help they needed.”

He said he would like to request "even a single person in the government" to explain to how the "crystal clear wording" in the report shows that every offer was treated the same.

"It clearly says that those who submitted tenders were treated differently. This is a fact," he continued, "And can anyone explain to me how, if three of the offers came from companies which it was determined didn’t have enough experience, one of these was cast aside, while the other two were recommended to continue to the next evaluation process stage?"

The NAO underlined that the assessment committee was inconsistent in the way it evaluated the tenders, Delia stressed. “Once again, can the government elucidate how it can say that all the offers were treated the same?”

After he illustrated the course of events which he said lead to the granting of the power station contract, including the setting up of three Panama companies, Delia said the picture was clear.

“I think people are realising that this power station was nothing but a money laundering machine to clean the money the government wanted to steal from the people,” he said.

“And Mizzi, after the report was published, said it was a ‘certification of best practice’”, he said, as he reiterated his call for Mizzi to step down.

Inconsistencies wouldn’t have changed final result - Muscat

Reacting to Delia’s statement, Muscat said that it was rich of the Opposition leader to speak about money laundering when he himself was being investigated about this.

“I don’t think there is anyone more apt to tell us about money laundering than a person who is being investigated for it, according to reports,” Muscat quipped.

Clearly irked, Delia asked the Prime Minister to substantiate his comment or take it back, with Muscat replying that he was merely quoting a newspaper report.

“If he is so annoyed, Delia can institute libel proceedings against The Sunday Times of Malta,” Muscat said, “… he has zero credibility when it comes to money laundering.”

“They [the Opposition] used to claim it was impossible to have cheaper electricity bills,” Muscat said, “And they said we could never switch to gas, as it would lead to even higher bills.”

Muscat said Delia’s criticism revolved around inconsistencies in the tender process. “But, in the same breath, he said the process had been pre-determined. If it had been pre-determined, there wouldn’t have been any inconsistencies and changes. Changes are a normal feature of such tendering processes.”

The Prime Minister accentuated that the NAO’s report noted that none of the inconsistencies would have changed the final result of the process.

“Delia left this part of the report out, meaning he either didn’t understand the document or doesn’t want people to know about the whole process.”

The interconnector’s CAPEX - the €300 million capital expenditure behind it - was not factored in when the its cost was compared to that of the power station, he said. “This is a shortcomings of the Auditor General’s report.”

“Because of this energy mix we now have, our electricity prices are now the second lowest in Europe.”

The Opposition was treating the energy matter in a “amateur” way, Muscat added.

Mizzi, addressing the debate, asked a series of questions on why the Opposition hadn’t, while it was in government, chosen options for Malta which would lead to cheaper power bills.

He said he could understand that the Auditor General pointed out some shortcomings “which are part of every process”.

But, in the same vein as Muscat, he focused on the report’s comments that the final decision - choosing Electrogas - would have been the same, despite the inconsistencies.

“The auditor said there was no evidence the deal was pre-arranged prior to the election,” Mizzi claimed.

Earlier

The discussion came after the Democratic Party asked, before the start of the parliamentary, that an urgent debate on the matter takes place in Parliament.

In a statement, PD leader Godfrey Farrugia said that the Auditor General’s report on the Delimara gas-fired power station project “raises serious doubts regarding the transparency of the tendering process that led to such project being awarded to Electrogas”.

“These doubts affect the integrity of the contracts between Electrogas and the government,” he underlined.

“Politicians are duty-bound to ensure that public funds are well spent. We expect accountability when this does not happen.”

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The PD leader emphasised that the report indicated that there was gross incompetence in the tendering process that led to the contract being awarded to Electrogas.

“Coupled with the facts that we already know about certain individuals who were meant to act in the best interests of the citizens, these mistakes become serious doubts that taint the integrity and transparency of the entire process,” Farrugia added.

In November, the PD filed a motion of no confidence in Tourism Minister Konrad Mizzi, in the wake of revelations that an investor in Electrogas was the owner of 17 Black, a Dubai company that appeared as a target client in the Panama companies of Mizzi and Prime Minister’s chief of staff Keith Schembri.

Last week, however, the Nationalist Party didn't back the motion, effectively moving it aside, and instead decided to discuss a motion they had previously brought forward, concerning the murder of Daphne Caruana Galizia.

The PN’s decision means that the motion of no confidence in Mizzi will only be debated, if at all, after Parliament’s Christmas recess.