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News | Wednesday, 19 May 2010 Issue. 164

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No comment from Lahmeyer on its role in Delimara tender

Blacklisted by the world Bank for corrupt practices, German engineering consultancy firm Lahmeyer International has refused to comment over the controversy surrounding their involvement in the adjudicating process of the Delimara Power Station extension project in Delimara worth €230 million.
Speaking to MaltaToday from Bad Vilbel in Germany, Lahmeyer’s business development manager Andreas Wiese stressed that “the company is cognisant of the report by the National Audit Office of Malta, however the company will refrain from commenting on the domestic debate regarding the findings of the report.”
In further comments, Andreas Wiese said that Lahmeyer feels it is being “treated unfairly” by both media and politicians.
Wiese told MaltaToday that for Lahmeyer to reply to this newspaper’s questions it was necessary to hold a board meeting and hold consultations with the company lawyer and other senior officials.
In his report on the award of the Delimara contract to Danish company BWSC, the Auditor General revealed that Lahmeyer had first approached Enemalta to carry out an evaluation of the technologies proposed when the bids were still classified as confidential. Enemalta initially turned down the offer but one month later, it engaged Lahmeyer by direct order to perform a technical analysis.
This choice however was considered to be a “mistake” by David Spiteri Gingell, who served as chairman of the committee that had selected Lahmeyer as consultant to the project.
Speaking on PBS last Monday, Spiteri Gingell stressed: “I admit I made a mistake not to vet the firm’s track record. I assumed that since the Malta Resources Authority (MRA) had worked with them in the past, they had already been vetted,” he said. “If I could turn the clock back I would decide differently.”
The German company had ranked BWSC’s technology in third place but its evaluation was crucial to keep the company in the running despite having submitted a prototype technology, which could have technically been excluded in the first instance by Enemalta.
In his report, the Auditor General explained that Lahmeyer’s selection as an independent consultant left much to be desired because it was blacklisted by the World Bank, had been involved in a joint project with BWSC – one of the bidders it had to assess – and the agent of the company, which eventually won the tender, had also worked as Lahmeyer’s agent up to December 2007.
The MRA said it dealt directly with Lahmeyer when asked whether Maltese agent Joseph Mizzi acted as intermediary.
Mizzi, previously an employee at Enemalta, was in the eye of the power station storm because of a series of e-mails exchanged with Danish company bosses in which, among others, he spoke of the need to “tap higher political sources” during the bidding process.
The Auditor said he found no “hard evidence” to substantiate allegations of corruption, but pointed out that this did not mean that the content of some of the e-mails sent by Joseph Mizzi was not cause for concern, “especially in so far as the way how certain restricted information seems to have been obtained from Enemalta”.
He also pointed out that evidence given by certain stakeholders, especially Joseph Mizzi, was “evasive and sometimes bordered on non-collaboration”, with interviewees citing lack of memory when confronted with direct questions.
Meanwhile, a statement that has appeared on Lahmeyer’s website dated May 6, 2010 explains that the European Bank for Reconstruction and Development (EBRD) has informed the company of their decision to unconditionally reinstate LI’s eligibility to be awarded EBRD financed contracts. The previous conditional eligibility has been removed from the EBRD website.
According to the statement, this follows the final external compliance monitoring report by which EBRD is satisfied with LI’s implementation of the Compliance Management System.

The company is blacklisted by the World Bank because of corrupt practices overseas. In 2003, Lahmeyer was convicted in Lesotho for paying bribes through an intermediary. Subsequently, in 2006, the World Bank blacklisted the company for seven years.
The Malta Resources Authority has defended its decision to use the services of a German consultancy firm blacklisted by the World Bank, insisting the law did not allow it to blacklist companies at the tendering stage.
The authority made use of Lahmeyer International’s services between May 2007 and December 2009 for “technical, regulatory consultancy related to the energy interconnector”,
Meanwhile the Malta Resources Authority responded to David Spiteri Gingell’s remarks by stating that “the process which led to the selection of Lahmeyer International was a public transparent process according to the public procurement regulations,” adding that “the regulator of the energy market MRA does not involve itself in contractual issues between a contracting authority and a private bidder.”
In its replies to a series of questions put by MaltaToday, MRA said that the first contract was given to Lahmeyer International after an international public call for submission of tenders. The direct order was related to work that was a follow-up on the original contract won by Lahmeyer International.
Lahmeyer were paid €397,500 whilst the direct order that followed cost €68,600.
Asked if Lahmayer ever informed MRA about their past business track-record as reflected in World Bank blacklisting, MRA replied that “the Malta Public Contracts Regulations do not allow for the blacklisting of any economic operator during the tendering process.”



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