The Prime Minister faces a not insignificant parliamentary motion by the Opposition to discuss the controversy surrounding the award of the Delimara tender – a €200 million extension to the power station.
The extension is essential for the power station if it is to continue to be able to satisfy future energy demands, but also to keep greenhouse gas emissions within the limits established by European Union directives by 2020.
The award of the tender, to Danish firm BWSC, has attracted controversy because the new turbine will be powered by a diesel engine, to be converted in future to a combined cycle gas turbine. A rival bidder, Israeli firm Bateman, claims its combined cycle gas turbine was cheaper than the BWSC offer. Bateman however never formally appealed the Department of Contracts’ decision to award the contract to BWSC, and instead filed a judicial protest in court.
In the meantime, new revelations from an election dossier compiled by the Enemalta management on 6 March 2008 give strong hints as to the corporation’s apparent bias in favour of a gas turbine. Why the Corporation’s technical evaluation board then opted for a diesel engine turbine is a moot point. Enemalta has presented its reasons for opting for diesel, maintaining this was the most economically advantageous offer.
However, there are serious doubts surrounding the tender process. One of them is the involvement of a former Enemalta officer who was BWSC’s technical representative here in Malta. E-mail conversations published by this newspaper between Joseph Mizzi and BWSC officials speak of “tapping into higher political sources”.
Another matter of concern is Enemalta’s demands to the government to redefine the scope of diesel engines as contemplated by Malta’s emissions laws. The Opposition contends that the Corporation effectively asked the government to relax emission limits, and amend the relevant legal notice, thereby allowing BWSC to safely tender for the Delimara extension with its diesel engine technology.
Beyond the technical considerations, the Enemalta dossier is clear on one thing: while gas was considered to be the “only way” for the future development of the power station, the Corporation decided some time before the award of the tender, to ditch this route and opt for diesel technology. Complicating matters for the government is the fact that Enemalta’s chairman, Alex Tranter, is a business partner of Nazzareno Vassallo, whose company will be carrying out the civil works for the Delimara extension. While Tranter declared this conflict of interest as early as 2008, his proximity to one of the interested parties in the tender only serves to further cement the perception that something is amiss in the Delimara tender.
As minister responsible for Enemalta, Austin Gatt’s overbearing role on the management of the corporation is portrayed as an “interference”. Although Gatt has refused such a description, saying that his ministry will never renounce its role in directing policy, the Enemalta dossier was drawn up by people close to the government.
On top of everything is the financial state of Enemalta itself. A compromising picture of the corporation was revealed in its financial estimates, with accumulated losses of €45 million expected for 2009. Bank loans and overdraft fund nearly 70% of Enemalta’s assets, painting a tenuous picture of the Corporation’s financial state.
Clearly, the state of Enemalta and the way it is being managed must be dealt with by Lawrence Gonzi – and he must be seen to be dealing with it. The Corporation’s credibility has already been dented after a nationwide blackout this summer cost businesses millions in lost trade. To make matters worse, the blackout appears to have already been predicted in an Enemalta report published in June 2006. But despite urgent recommendations to upgrade the Delimara power station before the end of 2008, there has been no significant change to Malta’s total electricity production capacity in the last three years. With nobody carrying the can for this costly blackout – politically or from a management perspective – one is led to believe that accountability counts for nothing in this government.
The same goes for the serious doubts elicited in the award of the Delimara tender. To let Austin Gatt just take the flak, as is his wont when a political ruckus crops up, will not limit the damage. Allowing this contentious matter to trudge on while accusations fly only reinforces the perception of the lack of accountability inside the Gonzi government.
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