The Scandinavian company awarded the contract for a major extension of the Delimara power station had the most advantageous offer on all counts, Infrastructure Minister Austin Gatt said yesterday.
Dr Gatt said that whoever was insisting that the contract should have been awarded to the Israeli company Bateman wanted the power tariffs to rise by an average 35 per cent.
The controversy erupted after Bateman, the losing bidder, wrote to Parliament's Public Accounts Committee claiming its offer was cheaper and more advantageous. Opposition Leader Joseph Muscat published the letter last week after the issue was raised in the media.
The extension to the Delimara power station, which will be completed by the end of 2011, will replace the Marsa plant that is being decommissioned.
Bateman was one of three bidders and came last in the adjudication process. Although it had the legal right to do so, the company did not appeal the adjudication decision.
Dr Gatt explained that the evaluation took into consideration the technical and financial aspects. From the technical side, Bateman came first of the three but in the financial part, which carried 75 per cent of the points, it placed last.
It was true the Bateman price tag for the equipment - €148.74 million - was cheaper than the price tag of chosen bidder BWSC: €164.9 million. However, Bateman's maintenance costs for the first five years stood at €36 million, double those quoted by BWSC. Therefore, the latter's bid turned out to be cheaper by over €2 million.
Dr Gatt explained that Bateman proposed gas turbines that could use diesel or natural gas as fuel while BWSC recommended diesel engines that could take diesel or heavy fuel oil (HFO). They could also use natural gas but only after a conversion costing €27.5 million. Dr Gatt ruled out the use of natural gas for the time being. Obtaining it was difficult as it was in high demand, not to mention other technical problems related to storing the gas and transporting it to Malta, which would effectively mean a consignment by sea practically every day.
He said Bateman's equipment would have to use diesel, which was more expensive than the HFO. A calculation of the cost per unit of electricity of both bidders showed that Bateman's costs were between 30 and 70 per cent higher than BWSC's.
Based on BWSC's offer, between 2011 and 2020, Malta would not only recoup double the capital expenditure but also pay for the conversion to gas.
Replying to criticism, Dr Gatt said emissions met EU standards and this was confirmed by the government's German environmental consultants.
He denied claims that the 65-metre chimney at Delimara would have to be raised by a further 30 metres. He said both bids required the construction of two 65-metre high chimneys.
Dr Gatt also denied claims that the space at Delimara was insufficient. While the BWSC proposal took up 4,900 square metres, 900 square metres more than Bateman's, the space available at Delimara amounted to 6,600 square metres.
He said the dust particles being emitted into the air would be collected by the new generation plant and stored in silos until shipped to Italy for recycling.
Responding to claims that a legal notice had been changed to suit his end, Dr Gatt said this was issued to correct a mistake that had been done in the transposition of EU directives into domestic law. The mistake had completely ruled out the use of diesel engines and the corrections were made after the Malta Environment and Planning Authority pointed out the mistake to the European Commission.