Minister calls for public inquiry

Investments and Industry Minister Austin Gatt has asked the chairman of Parliament's Public Accounts Committee (PAC), Labour MP Charles Mangion, to conduct a public inquiry into allegations by Opposition Leader Alfred Sant regarding the workings of the Water Services Corporation.

Speaking on radio last Sunday, Dr Sant called for a public inquiry into affairs at the WSC, claiming that two contractors who were given most of the corporation's contracts were falling behind in their work and increasing the expenditure.

His comments were made in the wake of ministerial criticism of the WSC board for its handling of cost overruns.

In his letter to Notary Mangion, Dr Gatt said the PAC had the power to investigate matters referred to it by the House, a minister or the Director of Audit.

"As a member of your committee, I invite you to initiate procedures for the PAC to investigate - directly or through the Auditor General - the allegations made by the Leader of the Opposition in regard to the Water Services Corporation," Dr Gatt said.

He said the allegations made by the Labour leader were:

1) That financial irregularities were involved in the tender process regarding the award of the Gozo sewage treatment plant contract to a Gozitan contractor. Dr Gatt said he considered this allegation as very serious and, therefore, he would ask the PAC to investigate whether the awarding of this contract had in any way breached financial regulations.

2) That the WSC chairman was covering alleged bad workmanship by the contractor engaged on the project.

3) That he (Dr Gatt) knew about this bad workmanship, so much so that he wanted to take action against the WSC chairman about it - an allegation which the minister was categorically denying.

Dr Gatt said he had full trust in Notary Mangion as chairman of the PAC - because he had always acted in a fair and just manner - as well as in the Auditor General. Therefore, Dr Gatt said he was certain the public inquiry being requested would be exhaustive and one to which any person with allegations to make would be able to resort to and speak freely and with the full protection Parliament offers.

Dr Gatt said he hoped the Leader of the Opposition would accept to attend the PAC meetings when dealing with the matter, either as one of the opposition members or else as a witness, so that one would have the opportunity to dialogue directly with him and assess the substance of the evidence he was able to produce.

Water Services Corporation chairman Michael Falzon insisted he had no connection with the Maltese contractor in the consortium awarded the contract for the Gozo sewage treatment plant.

In a letter to The Times (see page 9) in reply to comments made by Dr Sant last Sunday, Mr Falzon said the process for the award of the Mellieha sewage treatment plant was a transparent one and that he was not involved in it.

"The selection board's conclusion was reached without any input from myself, as members of the board can attest," Mr Falzon added.

In his letter, Mr Falzon explained his involvement in building construction after he resumed his practice as an architect at the end of his parliamentary career in 1996.

He said that, in February 2002, a company he owned joined three other companies to invest in a piece of land for the development of a number of residential units. Subsequently, all four companies became shareholders in a second company set up to conduct further development projects.

Mr Falzon said "one of those four companies is a Polidano Group company, which group also provides services to the WSC".

He noted that the works for the Mellieha sewage treatment plant were awarded to IBI-Polidano consortium on November 19, 2004 after calls for tenders were made to a number of Italian companies, including IBI.

Referring to Dr Sant's allegation that Polidano Bros were awarded the majority of WSC contracts, Mr Falzon said that, from 2000 to date, the value of contracts awarded by the WSC to Polidano Group (excluding the Mellieha sewage treatment plant, which is being paid by the Italian protocol) was less than three per cent of the total value of WSC contracts.