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NEWS | Wednesday, 22 August 2007

Michael Falzon withdraws resignation

Matthew vella

The chairman of the Water Service Corporation (WSC) Michael Falzon yesterday withdrew his resignation offer after conciliatory talks held with Investments Minister Austin Gatt.
The former Nationalist minister resigned last Friday, outraged at a letter which Falzon said implied an “astounding lack of trust” on the part of the minister in the board of directors and in the management of the corporation.
Falzon was sent a letter from Austin Gatt reprimanding the board over cost over-runs on capital projects. In his letter, the minister voiced his “preoccupation” over variations on the waste sewage plants being built in Mellieha and Tal-Kus, Gozo, claiming they were being treated “superficially” by the management.
Yesterday, an ad hoc monitoring board was set up over the issue of overruns, which the WSC said in a letter involves €120,000.
“To date, the Corporation WSC has only approved one variation order re Malta North plant project resulting from the rerouting of the pressure main following MEPA permit constraints. The original estimate of the contractor was for an increase of EUR180,000. This was reduced to EUR120,000,” the WSC said.
The two party veterans healed the rift just days after Gatt wrote to Falzon saying it was “unacceptable that these variations are treated in this superficial manner by management.”
“It is to my mind completely inappropriate that with these amounts of over-runs no one seems to even want to consider seeing who should carry the administrative responsibility for having incurred them.
“In my books this is the basic tenet of proper governance particularly when projects are being financed through public funds.”
The minister then listed his recommendations to the board on how it should proceed, and how the management should be held accountable.
“I would appreciate if you inform me should the board not agree with my suggestions in order that I may take the appropriate action, including an investigation by the Auditor General to determine whether the over-runs were avoidable and, if yes, to determine who is responsible for allowing them.”


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