Last month, together with Labour leader Dr Joseph Muscat, I visited the National Audit Office (NAO) to present documented evidence on Lahmeyer International’s unethical role in the award of the contract of the extension of the Delimara Power Station to Danish company BWSC.
Enemalta Corporation appointed Lahmeyer International to technically evaluate the plants proposed by the bidders. The NAO has been directed by the Public Accounts Committee of Parliament to investigate this contract after it received a letter saying that the tendering process was highly irregular.
We produced proof that the German company Lahmeyer International, appointed by Enemalta, is blacklisted by the World Bank as it has not accepted to divulge information and cooperate in investigations about previous cases of corruption in which it has been involved.
We handed over a document showing that Joseph Mizzi – BWSC’s exclusive agent in Malta – is also Lahmeyer International’s exclusive agent locally. We also provided documentation on three power stations built jointly by BWSC and Lahmeyer International in Northern Iraq.
This time, Infrastructure Minister Austin Gatt decided not to commit the same mistake committed when we presented evidence of cases corruption by BWSC in several countries. He had told them to come to Malta and talk to the NAO and us. They came. They saw. And they raised more questions than they answered.
This time Minister Gatt did not ask Lahmeyer International to come and visit us. Instead Lahmeyer International wrote a letter to the Malta Resources Authority to give their version of the facts and to try and refute our allegations.
They have managed to dig a deeper hole for themselves. They cannot deny that they are blacklisted by the World Bank. Lahmeyer International is still in the current list of 141 companies ineligible to use World Bank funds. According to the World Bank, Lahmeyer International is “ineligible to be awarded a World Bank-financed contract for the period between 3 November 2006 to 3 November 2013 because it was found to have violated the fraud and corruption provisions of the Procurement Guidelines or the Consultants Guidelines, paragraphs 1.14 and 1.22, respectively. These findings were made through an administrative process that permitted the accused firms and individuals to respond to the allegations.”
According to these paragraphs, the World Bank requires “that borrowers (including beneficiaries of bank loans), as well as bidders, suppliers, and contractors and their subcontractors under Bank-financed contracts, observe the highest standard of ethics during the procurement and execution of such contracts.”
The World Bank was ready to take Lahmeyer International off the black list in November 2009 but the German company first had to co-operate with the World Bank and divulge information about corruption and irregularities in which it has been involved. So far, under its present management, Lahmeyer International has not complied with the request of the World Bank. Lahmeyer International is trying to distance itself from the past, as if its corruption was carried out by another company on another planet. Yet according to the World Bank, its top management refuses “to co-operate with it in disclosing past sanction able misconduct.”
On 18 February 2008 German MP Manie Van Dyk, in a speech in the German Parliament referred to Lahmeyer’s “shameful record for unethical business practices.” Recently, the Economic and Financial Crimes Commission of Nigeria’s House of Representatives started investigating 17 power contracting firms “over alleged corrupt practices in the handling of some Independent Power Projects in some parts of the country” between 1999 and 2007. Lahmeyer International is one of the companies under investigation.
In a letter forwarded to the NAO by the Malta Resources Authority, the German firm Lahmeyer International states that the only partner it has in Malta is Typeset Limited, with which it reached an agreement in 2007.
Typeset Limited is owned by Joseph Mizzi, so much so that it was through this company that Mizzi presented the bid prepared by Danish Company BWSC for the extension of the power station at Delimara.
In this bid, which is an attempt to clear its name, Lahmeyer International is stating that its exclusive agent in Malta is Typeset Ltd. But it is concealing the fact that Typeset Ltd. is owned by none other than Joseph Mizzi.
A year earlier, when Mizzi and Lahmeyer International signed a contractual agreement appointing his company (Typeset Ltd) as its exclusive local agent in 2007, Mizzi had already used Typeset Ltd to present BWSC’s bid for the extension of the Delimara Power Station.
In 2008, Enemalta appointed Lahmeyer International in its role of “independent consultant” even though its local agent was the same local agent of BWSC – one of the bidders.
Between July and December 2000, Lahmeyer International and BWSC worked together in a joint project to build three new diesel power stations in the Northern Iraq Governorates of Dohuk, Erbil and Sulaimaniyah. Lahmayer International was involved in the management and supervision of all aspects of the erection, commissioning, testing and handing over of the three power stations built by BWSC.
Enemalta saw nothing wrong in appointing Lahmeyer International to “independently” assess BWSC – its own partner in Northern Iraq in the UN Oil for Food Programme, mired in bribery and corruption.
Lahmeyer International says that it has done a fair and independent assessment of the bids for the Delimara Power Station extension and in no way favoured BWSC, so much so that it placed it third in its ranking, after Bateman and Socoin. This means that Lahmeyer International actually placed BWSC first, because although there were four bidders, only two were being really considered by Enemalta – BWSC and MAN, because they offered plants operating on heavy fuel oil.
Enemalta had already discarded the gas powered plants offered by Bateman and Socoin although in mid-2006, Minister Gatt and the Cabinet approved the National Energy Plan 2006 – 2015, which stated that no more heavy fuel oil plants were to be installed in Malta. Both Gatt and the National Energy Plan said that the new plants would be fired by natural gas.
And yet, in April 2009 Government and Enemalta awarded the contract of the Delimara Power Station extension to BWSC’s heavy fuel oil plant, after government changed the law to enable this plant to operate, and after Lahmeyer International had recommended BWSC’s emission abatement equipment as “plausible” and called it “state of the art” technology when in fact as a prototype.
This is ‘technology in development’, untried and untested, and we are to serve as its Guinea pigs.
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