Company convicted in VAT fraud awarded government contract - Muscat

A paint supplies company which was convicted in the VAT fraud scandal was awarded a €48,000 government contract by the Contracts Department just months after the court verdict, Labour leader Joseph Muscat complained today.

He said at a May Day rally in Fgura that despite the fraud of some €10 million in the VAT Department, the government had not done anything for anyone to assume responsibility.

In Parliament last Wednesday, Finance Minister Tonio Fenech said that he had been informed that convicted companies had been blacklisted - yet government documents showed that a paint supplies company convicted in the scandal had been awarded a contract to supply a department under Mr Fenech's direct ministerial responsibilities.

In his speech Dr Muscat spoke mostly on the power station extension contract and insisted once more that it was not enough for Nationalist MPs to say they were against what had happened - they also had to vote for the people when the issue was discussed in Parliament next Thursday.

Dr Muscat challenged the Prime Minister to allow direct television transmission of the debate and to grant a free vote to his MPs.

He said the PL would announce what it would do in government over this and similar issues.

Dr Muscat said that on Wednesday he would be showing solidarity with Marsaxlokk residents "in a peaceful but resolute manner," visiting families living close to where the government is proposing extending the power station.

The Labour leader accused the government of wanting the people to accept an experiment with their health through a prototype plant operating on harmful heavy fuel oil.

The Auditor General had also called for transparency but the government did not find the time to draft a bill on contract transparency, he said

“Nothing is done by coincidence,” Dr Muscat charged.

The government, he said, had not even wanted to publish the contract, which was the minimum it could do.

But when it saw that the people were backing Labour, it changed position and asked BWSC permission to publish. This was humiliation, he said, adding that the government should not take orders from anyone, let alone a foreign company.

The Prime Minister, Dr Muscat said, knew about Labour’s accusations and suspicions about the tender well before signing the contract and he could have stopped it or at the very least have studied it. He did not.

Dr Muscat accused the government of being unwilling to halt political corruption and said that corruption was a tax.

No decisive action had been taken on the VAT scandal in which €10 million had been lost, he said ,adding that no one knew what had become of the internal inquiry and no one shouldered responsibility.

Earlier, Dr Muscat said that this government had increased the cost of services by 14 per cent each year.

Last year’s deficit was €40 million more than had been forecast in November and well above what was projected.

And although before the election the government had promised a reduction in income tax, two budgets had already been presented and this promise had not been kept.