Auditor found no corruption, PM insists

Unruffled and defiant, the Prime Minister yesterday defended the power station extension contract awarded to Danish company BWSC, insisting the Auditor General's investigation found no evidence of corruption.

Lawrence Gonzi said the Auditor did not find irregularities that warranted the cancellation of the contract and so "the process was valid and it now had to be implemented".

"Nobody has the right to twist or misrepresent the Auditor's conclusions. The Auditor carried out a thorough investigation and could have asked us to annul the process if he felt it was necessary. He did not do so," Dr Gonzi said, insisting he agreed with the Auditor's conclusions and would seek to implement the recommendations.

However, he skirted the issue of who should shoulder political or administrative responsibility for the various shortcomings, some serious, highlighted by the Auditor.

In a report more than 200 pages long, the Auditor found that Enemalta had ignored its own specifications when it kept in the running two companies, one that eventually won the tender offering prototype technology.

Enemalta had originally asked for "tried and tested" technology. BWSC's combination of diesel engines with pollution-control mechanisms is not used anywhere else.

The Auditor also raised questions about Enemalta's choice of German company Lahmeyer International to draw up a technical evaluation of the bids when the company was blacklisted by the World Bank and the Maltese agent for BWSC used to work for them.

Lahmeyer's report was crucial for Enemalta to allow the prototype technologies to stay in the race.

Enemalta chairman Alex Tranter also came in for some scathing remarks because of his connection with a company that was involved with BWSC. The Auditor concluded that it was not enough for Mr Tranter to declare his conflict of interest but should have resigned even before appointing the adjudication board. When asked about the Auditor's statement that the tendering process should have been stopped and re-opened after new emission laws adopted by the government changed the tender's parameters, Dr Gonzi insisted the Auditor did not say the process was "vitiated".

"The Auditor said that, with the benefit of hindsight, we could have avoided certain controversies if the process worked in a different way. Nowhere did the Auditor say the process was vitiated," the Prime Minister said, cautioning against "stretching the Auditor's report like chewing gum".

The Auditor was critical of the change in legislation that occurred midway through the tendering process and which had a favourable impact on certain bids, including BWSC's.

"Once the original tender specifications referring to emission levels were changed through the legislative amendment made in January 2008, the decision by Enemalta and the Department of Contracts to continue with the ongoing tender is questioned by the National Audit Office.

With the benefit of hindsight, it is felt that much of the controversy surrounding this tender could have been avoided had the tendering process been stopped and reissued to reflect such change in specifications," the Auditor concluded.