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Editorial | Wednesday, 20 May 2009

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A question of credibility

The government appears to be in full defence mode. Faced with serious allegations of irregularities into the awarding of a €200 million contract for the Delimara power station, the Gonzi administration has so far reacted by simply turning its guns onto the Opposition leader – accusing him of speaking on behalf of an aggrieved company whom he does not represent.
Such a partisan response was perhaps inevitable, with a European election campaign currently in full swing. But it is hardly satisfactory, given the serious implications of the case for Malta’s international reputation. Nor does the government’s official justification address the health and safety concerns raised in the objections to the tender process – compromised, according to the allegations, by an administrative change which permitted the Department of Contracts to choose a technology which would result in higher emissions (and therefore more pollution) as well as creating an additional problem of some 40 to 60 tonnes of toxic waste to dispose of each day.
The story, which was carried last Sunday by sister paper Illum, has since taken a surprising twist. In answer to MaltaToday’s questions, the Contracts Director revealed that the contract was fact awarded to Scandinavian contractors Burmeister & Wain on April 3 – i.e., one month after the allegations were first raised in a letter to the Prime Minister by Israeli competitor, Hutney-Bateman (HB), on 2 March.
But the most significant allegation has to date been the one most ignored by the government. In its letter to the Prime Minister, HB claimed that “the Maltese law on emissions was ‘strangely’ amended midway during the tendering process and therefore after all the technical bids were opened, discussed and evaluated.”
HB further claimed that as a result of the revised law, the maximum carbon emissions permissible were increased: “This amendment seems to have been enacted with the only scope of strengthening the bid of the dirtier DECC Power stations which would otherwise have had to be disqualified as non-compliant with the maximum emission terms of the tender requirements.”
This is a particularly damning statement, as it is difficult to speculate an alternative reason for raising the carbon emissions threshold, at a time when all countries are committed to lower their emissions to meet stringent international climate change targets.
There would have to be a very good reason to justify Malta doing the opposite: but Infrastructure Minister Austin Gatt’s explanation has only deepened existing doubts.
Dr Gatt said on Monday that the legal change in question was “irrelevant”; but he stopped short of explaining why. How can any decision which effectively shifts the goalposts of the bidding process, afterwards be described as “irrelevant” to the selfsame process?
This makes no sense whatsoever, but fortunately not all Dr Gatt’s colleagues shared his ambiguity in their answers. The Prime Minister, for instance, explained that as a result of the new legislation, Malta’s emissions law was “now in line with European directives.”
The Resources Minister went one step further, by identifying the specific directive – again in answer to this newspaper’s questions – as the Large Combustion Plant Directive 2001/80/EC. But there are two immediate flaws with this official justification. The first, already raised by the original complaint letter, concerns the timing of the legal notice. The new legislation came into force in January 2008: that is, several months after the call for tenders was issued. How was the tender application process therefore even allowed to get under way, when it must have been known beforehand that the rules of the game were about to be changed behind the scenes?
The second problem is of a more practical nature: if HB’s letter is accurate in its facts, the new limits introduced in January 2008 were actually higher than the ones they purported to replace: “the maximum level of emissions,” we are told, “were inexplicably increased.”
What sense could it possibly make, therefore, to revise Malta’s emissions legislation to conform to EU directives... when the existing legislation was already in line with these directives before it was amended?
Something is clearly not right, and the government’s explanations have not shed any light whatsoever on the issue. Furthermore, the Prime Minister’s additional declaration that the unsuccessful bidder was entitled to appeal against the decision, but chose not to, is neither here nor there. The issue is not whether the Israeli-owned company should have been awarded the contract or not. The real issue at stake here concerns transparency within the entire tendering process, which has now been overshadowed by what appears to be a very well-grounded doubt.
The matter is now a question of credibility for the Gonzi administration, which has to do more to reassure the public that a decision of such magnitude – i.e., to permit higher emissions by local industry, while simultaneously selecting an outdated and dirty technology in apparent defiance of its own carbon reduction targets – was taken responsibly and with the national interest in mind.
All things told, a public inquiry is clearly in order.


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