WSC chairman denies conflict of interest

Water Services Corporation chairman Michael Falzon yesterday insisted he did not breach the Code of Ethics for board directors in the public sector in any way since he became the corporation's chairman.

Mr Falzon did not inform Government of his links to the contractor Polidano Brothers because he felt there was no conflict of interest, he said, adding that he had absolutely nothing to do with the way contracts were awarded by the corporation; nor did he have any say in selecting the members of the selection board.

The declaration was made in an e-mail to Investments Minister Austin Gatt, who asked Mr Falzon whether the Code of Ethics had been breached. Dr Gatt wrote to Mr Falzon following Mr Falzon's letter to The Times in which he spelt out his relationship with Polidano Bros.

In his letter, and in yesterday's reply to Dr Gatt, Mr Falzon said that in February 2002 a company he owned, together with three other companies, invested 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 carry out further development projects. One of those four was a Polidano Group company.

"I have no other interest, economic or otherwise, with the Polidano Group, which was awarded several contracts by the WSC. But even if I wanted to, I could not have any say in such awards because I could not control the members of the selection boards which awards the contracts," Mr Falzon said.

In his letter to The Times, Mr Falzon said the Polidano Group was only awarded contracts when its tender was cheaper than the others. From 2000 to date, the value of contracts awarded by WSC to the Polidano Group amounted to less than three per cent of the total value of the corporation's contracts.

"These are very different from the issues covered by the Code of Ethics and I felt no need to make any declarations in terms of the same code. But when suspicions started becoming rife after what (Labour leader) Alfred Sant said, I decided to make a public declaration to show that what was being said was not true," Mr Falzon said.

"The situation is clear enough and, while I feel I should give you any information you might ask of me, I don't feel obliged to reply to the MLP each time they decide to raise a doubt, especially when it is clear that they do so to hide the truth rather than expose it," Mr Falzon said.

Dr Gatt said in his reply that, though he had no doubts about Mr Falzon's declarations that he did not form part of any selection board, "to avoid equivocations" he instructed him to ask whoever is responsible at the WSC to carry out research in the files about contracts awarded to Polidano Brothers since the day Mr Falzon had business interests with Mr Polidano.

Dr Gatt asked Mr Falzon for all the information related to such tenders, including who were the members of the selection board and who bid for the same tender and the amounts involved, adding he intended to publish the information, even though these details would have already been published by the Contracts Committee when the tenders were originally awarded.

"But it is evident that the Labour Party media is too lazy to do the research itself," Dr Gatt concluded.