It was amazing how the Prime Minister preached about not wasting public funds but then squandered €4.6 million on direct orders at Mater Dei Hospital, Labour leader Joseph Muscat said yesterday.

"Prime Minister Lawrence Gonzi preaches about not wasting money in terms of water and electricity tariffs, in the health sector and on people's pensions and then he goes and spends millions of euros at the stroke of a pen," Dr Muscat told a Labour Party (PL) activity in Mtarfa last night.

Dr Muscat said that an Israeli company tendering for the extension of the Delimara power station was not the government's preferred bidder even through its tender was cheaper and more environmentally friendly than the other two bids.

In a letter sent to the Prime Minister, the Israeli company, Bateman Hutny, explained that its rival bidders would have to incur an additional cost to convert their proposed stations from heavy fuel oil to gas-operated. Bateman said that according to its bid there was no additional cost to switch from diesel to gas.

Dr Muscat said the government had admitted picking the more expensive bid and was making "false excuses".

He said the government had said gas was more expensive than heavy fuel oil and this was one of the reasons why another bidder was preferred to Bateman.

Dr Muscat pointed out that the government had recently announced it was planning to change from heavy fuel oil to gas by 2014.