News | Sunday, 14 June 2009

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Delimara tender

Evarist Bartolo reveals: insider gave Danish firm dirty tender

Matthew Vella
Labour MP and MaltaToday columnist Evarist Bartolo today reveals how a Maltese intermediary arranged meetings between Danish company BWSC – the selected bidder for the new power station at Delimara – with top Enemalta officials back in 2005, months before the formal tendering process started.
The meetings provided BWSC with “inside information” that gave the firm a strategic advantage over the other bidders.
The Maltese intermediary was in contact with BWSC’s business development manager, Angers Langhorn, as early as 11 May 2005, when he informed him that the firm had to “tap another source higher up in the political hierarchy.”The award of the 100MW extension to the Delimara power station to BWSC has attracted controversy for the choice of BWSC’s fuel oil turbine, over a cheaper and more environmentally friendly gas turbine proposed by Israeli firm Bateman.
BWSC’s offer costs €165 million, €27 million to convert to gas, and €18 million in maintenance costs over five years. Bateman’s gas turbine costs €148 million and €35 million in maintenance costs over five years. In his column today, Bartolo writes how BWSC officials kept in contact with their Maltese intermediary, whom they described as “intelligence working in fifth gear”.
The intermediary held unofficial meetings with Enemalta officials and informed BWSC of what they could expect from their competitors before the formal pre-tendering process started.
As early as March 2005, he informed BWSC’s sales manager Martin Kok Jensen that “your main competitors are surely Wartsila and MAN B&W as engine manufacturers.”
The formal pre-tendering process started in October 2005, and in April 2009, BWSC was awarded the €200 million contract for the extension of the Delimara power plant, amid a controversy over alleged irregularities during the adjudicating process.
The rival bidder, Israeli company Ido Hutney Projekt/Bateman Energies BV, sent a letter to Prime Minister Lawrence Gonzi last March, to complain about the adjudicating process.
BWSC have reportedly submitted a prototype, never tested, and highly polluting technology that runs on heavy fuel oil and will require handling between 50 to 60 tonnes of toxic waste per day.
While no environmental impact assessment was conducted for the new power station extension, government even increased the allowable emission limits for Delimara, by means of a legal notice back in January 2008 – right in the middle of the tender process – which enabled the diesel engine technology to comply with the requirements, in contrast to the original levels on the proper tender document.
But the main issue around the tender is that the evaluation model does not take into account the use of natural gas, although the use of natural gas was declared as a strategic goal for Malta by the Climate Change Committee.
While it is true that Heavy Fuel Oil (HFO) is cheaper than natural gas, environmentalists told this newspaper that a plant run on natural gas would have incurred much lower running costs over 15-20 years than the alternatives offered.
Engineers have also questioned the reasoning behind the choice of fuel oil rather than gas, as well as the increase in emission limits, in addition to the production of 40 to 60 tonnes of toxic waste every day, that would have to be shipped to third countries at an extra cost.
Hutney-Batemen has now filed a judicial protest to overturn the decision to choose BWSC. Hutney-Bateman’s bid involved the use of a Combined Cycle Gas Turbine (CCGT), which emits lower carbon dioxide volumes than the chosen technology – Diesel Engine Combined Cycle (DECC), which makes use of a more polluting fuel.
Most revealing of all, Hutney-Bateman revealed that in May 2008, it had been sent an email by mistake which revealed that the decision to drop its bid had already been taken.
When Hutney-Bateman drew the corporation’s attention to the fact that it had received this email, and was therefore cognisant of the rejection of its bid, the Israeli company was once again shortlisted, only to later discover that its bid had been rejected at a point when it was no longer possible to appeal.

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