Matthew Vella
Enemalta chairman Alex Tranter has admitted to having “a potential conflict of interest” on the €200 million power station extension, because his business partner – Nazzareno Vassallo – is involved in its construction.
Tranter is the director of several companies owned by building contractor Vassallo, among them Caremalta Finance, Caremalta Group, Caremalta Ltd, Caremalta Mellieha, and Vassallo Joiners.
He is also a shareholder and director in software company Makeezi. The other shareholder is Vassallo Builders Group, which will be involved in the construction of the Delimara 100MW extension, a tender mired in controversy.
“A potential - conflict of interest is possible,” Tranter told MaltaToday yesterday.
“As soon as I was aware of such possibility, I declared this to the Enemalta board of directors on 26 June 2008. This conflict of interest arose after a shareholder of the company I worked for in my private business, was being listed by one of the bidders as a possible, though not definite, sub contractor for the initial part of the contract when civil works would be undertaken.”
It is known that Enemalta first received proposals for its 100MW extension in late 2005 from 26 companies, most of which sent delegations to visit Enemalta, accompanied by local agents. Invitations to tender were then published in August 2007.
But Tranter said he was “in no way involved at any stage or in any form” in the tender bid, or in “any subsequent discussions” on the tender.
“The deputy chairman took over the chairing of the meetings of the Enemalta board whenever this item was raised for discussion. It is pertinent to note that the structure of negotiation and adjudication of the said tender was independent of and distinct and separate from the board of directors, whether I was chairing the meeting or not.”
Tranter also said he informed the Ministry for Infrastructure, Transport and Communications (MITC) the Chairman of the Adjudication Committee and the Enemalta board secretary of his conflict, and this was duly recorded in the Corporation’s minutes.
“Minister Austin Gatt has already made a similar statement on this issue last week in Parliament, during the debate on the Enemalta Estimates,” Tranter said.
According to the MITC’s code of ethics, in tendering and procurement procedures directors must ensure “the highest possible level of accountability and transparency” at every stage of procurement.
Moreover directors must avoid “any actual, perceived or potential conflict of interest at all costs.”
But the code also says conflict of interest should not be “a deterrent for competent persons to take up public office.”
€200 million question The tender awarded to Danish company BWSC is controversial because of the choice of a fuel oil turbine, over a cheaper and more environmentally friendly gas turbine proposed by the Israeli firm Ido Hutney Projekt/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.
Labour MP Evarist Bartolo has declared that a Maltese intermediary arranged meetings between BWSC with top Enemalta officials back in 2005, months before the formal tendering process started.
Enemalta have refuted the claims, saying it regularly receives presentations from suppliers to keep up to date with the industrial developments, and that it had been evaluating the possible use of a 35MW extension in 2005.
But Bartolo says that BWSC was provided with “inside information” via a Maltese intermediary who – as early as 11 May 2005 – informed BWSC’s business development manager Angers Langhorn, that the firm had to “tap another source higher up in the political hierarchy.”
The claims have not been denied so far.
But even more controversial is the fact that no environmental impact assessment has been conducted for the new power station extension.
And government even increased the allowable emission limits for Delimara, by means of a legal notice in January 2008 – right in the middle of the tender process – that enabled BWSC’s diesel engine to comply with the requirements, in contrast to the original levels on the proper tender document.
Additionally, Malta’s climate change committee has declared the use of natural gas as a strategic goal.
Enemalta says the plant conforms fully to the environmental legislation and directives and has the least cost of generation, which will have a positive effect of lowering operating costs and electricity tariffs.
Batemen has now filed a judicial protest to overturn the decision, saying that in May 2008 it was sent an email by mistake which revealed that the decision to drop its bid had already been taken.
When 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.
Conflicts galore This is not the first conflict of interest to hit Austin Gatt’s ministry, where chairmen of government boards are often private entrepreneurs in their own right.
Claudio Grech, the former right-hand man of Austin Gatt, is today the chairman of the Malta IT Agency (MITA). He has rebutted suggestions that his role as CEO of Smart City Malta could lead to a conflict of interest.
Another is Joe Fenech Conti, the CEO of Datatrak Holdings. Datatrak provides the IT infrastructure that processes speed camera pictures and gets a cut from the fines collected by speed cameras. But Fenech Conti is also the chairman of Roads Network Ltd, the government company that gives the green light for the installation of speed cameras.
Gatt’s ministry says that Fenech Conti “has more than proven himself in the private sector for his managerial abilities”. In a past comment, the ministry accused this newspaper of having “a warped sense of what constitutes a conflict of interest” over its probing questions into Joe Fenech Conti’s position.
Any comments?
If you wish your comments to be published in our Letters pages please click button below. Please write a contact number and a postal address where you may be contacted.
Search:
MALTATODAY
BUSINESSTODAY
Download MaltaToday Sunday issue front page in pdf file format
All the interviews from Reporter on MaltaToday's YouTube channel.
