Power station: EU fears procurement law may have been broken

The government has until Wednesday to answer to a set of queries raised by Brussels over the controversial tender awarded to Danish company BWSC for the construction of the new Delimara power station extension.

The power station extension was approved by Mepa following a rowdy public meeting last January.

A letter of formal notice - the first of a three-pronged EU legal procedure - has been sent to the government by the European Commission claiming Malta broke EU procurement rules when awarding the controversial €200 million tender to BWSC, TheSundayTimes has learnt.

According to EU sources, the Commission commenced legal action over the issue on its own initiative.

When contacted, a Commission spokesman said: "The Commission sent a letter of formal notice to the Malta government in June over the power station tender.

"The Commission has concerns that Malta might have infringed EU public procurement law in the tender procedure carried out by Enemalta... Malta has been requested to submit its observations on the Enemalta tender procedure within two months (of) the letter of formal notice," the spokesman said.

The Sunday Times is informed that Malta was given until Wednesday to respond, and if the EU executive is not satisfied with the replies it may issue a formal accusation, known as a ‘reasoned opinion', which might eventually drag Malta before the European Court of Justice.

"At the moment we are only requesting information on suspicions that Malta didn't conform to EU rules when awarding this tender," the sources said.

"We are just trying to seek clarifications from the Maltese authorities. We hope we will be satisfied and close the case. If not, we might choose to go to another stage in our infringement procedures," the sources said. The power station extension tender has been a hot potato since its inception. Various allegations of corruption have been levelled after the contract was awarded to the Danish company, amid further accusations that Malta chose the wrong technology.

The EU sources said the Commission was not investigating the environmental aspect of the tender, such as the kind of fuel will be used to fire the new plant, since that is up to the Maltese government to decide upon as long as it observes EU environmental rules.

The Commission has raised questions about the procurement rules used by Enemalta, particularly in relation to the conditions set out in the original tender document.

"We are primarily concerned (about) the awarding authority aspect of the tender, particularly about the change of some technical specifications while the selection process was already ongoing - as well as on the information element as we think Enemalta did not observe the rules in the tender visa-vis the non-selected bidders."

Although usually all the Commission's decisions related to infringements are made public, this time the formal notice to the Maltese government on the power station contract has been kept under wraps.

According to the sources, this was done to "avoid further speculation on a highly controversial subject".