Notes from a dossier, and why Mizzi was not bluffing
It is remarkable that on 18th November 2006, the Danish company BWSC through its local representative Joseph Mizzi had even bothered to submit a bid to build a new 100MW power station at Delimara. It seemed an impossible task to win that contract: Enemalta had abandoned its 2005 plans to install an electricity generation plant powered by medium speed diesel gensets using heavy fuel oil as the main source of fuel. BWSC had been very well placed to win that contract. Combined with its long tradition of supplying such power stations in 50 countries around the world, in Mizzi BWSC had found a formidable operator who assured them that they would win that contract as he had excellent contacts within Enemalta who would provide him with a constant supply of inside information and was also ready to tap people “higher up in the political hierarchy” to make things happen the way he wanted.
But by 2006 the landscape had changed completely for Mizzi and BWSC. Government and Enemalta decided that for a number of reasons Malta’s new electricity generation plants would not be powered by medium speed diesel gensets using heavy fuel oil, but by combined cycle gas turbines where BWSC has no track record.
On 20th June 2006 in an Enemalta seminar addressed by Anthony Rizzo, Peter Grima, Alex Tranter and Minister Austin Gatt, it was made clear that a power station powered by medium speed diesel gensets “does not meet present” environmental standards while power stations powered by combined cycle gas turbines did. One of the recommended solutions to meet the need for 300MW to be generated by 2010 was the building of “a combined cycle gas turbine 130MW plant.” The other 200MW would come from a cable link to Sicily.
So it was curious to say the least, that in November 2006 Mizzi and BWSC went ahead to submit a bid for the new power station that would be powered by heavy fuel oil. For their bid to stand any chance of success two basic things had to happen: government had to change Legal Notice (LN) 329 of 2002, that set stringent emission levels that the BWSC plant would be unable to meet; and government had to change its Cabinet decision to opt for gas turbines instead of a plant powered by heavy fuel oil.
Mizzi and BWSC managed to achieve both during the tendering process that spanned from 18th October 2006 to the beginning of April 2009. A dossier prepared by Enemalta top officials and carrying the date of 6th March 2008 states: “…in early 2008 the Government accepted the Corporation’s recommendations to redefine the scope of the definition of ‘diesel engines’ within LN 329/2002 and a LN was issued in this regard.”
Once this legal notice was enacted, local environmental laws were relaxed and BWSC’s plant could operate within them. BWSC and Mizzi were so confident that the legal notice would be changed and allow them to operate with their plant, that they had already participated in two sets of negotiation meetings with Enemalta between 12th November 2007 and 16th November 2007 and between 10th December 2007 and 11th December 2007.
The legal notice was changed at the beginning of January 2008 just before BWSC and Mizzi had a third set of negotiation meetings on the 7th and 8th February 2008. They held final negotiation meetings between 30th June 2008 and 4th July 2008 and then between 20th August 2008 and 22nd August 2008. By then Enemalta had tried to exclude the only bidder – Bateman Ido Hutny – with a combined cycle gas turbine plant! Incredible but true.
The Enemalta Corporation dossier dated 6 March 2008 says: “This Generation Plan summarises the investigations carried out by Enemalta Corporation into the optimum generation plant, which can meet the requirements of the present and expected environmental legislation at the lowest generation cost… This report identifies the use of Combined Cycle Gas Turbines (CCGT) as being the only generating plant able to comply with the present expected emissions limits in 2020.” (Page 81)
Commenting on the status of the 100MW generating plant tender which was then approaching its final decisive phase the 6th March 2008 dossier states: “Four bidders (Man – Germany, Socoin – Spain, BWSC – Denmark and Ido Hutny – Slovakia) submitted satisfactory bids… Meetings have been held with Socoin, Man and Ido Hutny to the pre-arranged schedule. This week meeting will be held with BWSC. Two of the bidders (Socoin and Ido Hutny) have offered gas turbine based CCGT plants which would fit within the allocated site. The other two (Man and BWSC) have offered medium speed diesel engines, and require twice the area of a CCGT plant, which will result in reducing the eventual capability of Delimara Power station to accommodate new plant.” (Page 83).
The dossier also points out that the new power station must not put in jeopardy the future needs of Delimara Power Station to build more generation plants. The new power station to be supplied by BWSC will be occupying at least 8430 sq.m, allowing a meagre 3110 sq.m. for the third phase.
One of the main conclusions of the Electricity Generation Plan 2006-2015 also stressed the need not to be short sighted and to stay away from choosing a power station powered by a technology that had a short life spam because of environmental obligations that Malta has to meet in the next decade:
“Although in this short term a 100MW diesel engine plant would meet National Emissions Ceiling limits, the limits anticipated by RAINS model for 2020 are so much lower that not even one 100MW plant would be acceptable using current technology limits. Since 2020 is well within the economic lifetime of such plant (20 years), it is not feasible to invest in such plant at this stage, knowing that in 2020 (after only 10 years of operation) it may not be able to operate.” (Page 44).
All legal obstacles, space considerations for future developments, environmental risks coming from a yet untested emission abatement equipment together with all the cost and logistics needed to handle and store thousands of tons of urea and export thousands of tons of toxic waste …everything was pushed aside to make it possible for BWSC to be awarded the contract to supply the 144MW new power station for the price of 200 million euro. Joseph Mizzi’s claims that his contacts within Enemalta and in the local top political hierarchy would deliver have proved to be true.
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BWSC had been very well placed to win that contract. Combined with its long tradition of supplying such power stations in 50 countries around the world, in Mizzi BWSC had found a formidable operator who assured them that they would win that contract as he had excellent contacts within Enemalta who would provide him with a constant supply of inside information and was also ready to tap people “higher up in the political hierarchy” to make things happen the way he wanted. 
