Update 2: EU to close proceedings over power station extension - PL reacts

Updated: Adds PN statement -

The European Commission has decided that infringement procedures against Malta over the power station extension should be closed.

The proceedings had been launched in June. The closure means the Commission found no violation of EU rules, a situation which would have seen Malta taken before the European Court of Justice.

“The Maltese Government has now been informed by the European Commission that, following a thorough analysis of the case, a proposal is to be submitted to the College of Commissioners at the earliest possible date for these infringement proceedings against Malta to be closed,” the government announced in a statement this afternoon.

The proceedings were launched on June 4 through a Letter of Formal Notice when the Commission complained about “the procedure carried out by Enemalta for the award of a contract for increasing the local generating capacity at the existing power plant station in Delimara (value: €165 million) and for a contract concerning the maintenance of such additional power plant (value: €18 million).”

The Maltese government replied on August 4 giving detailed reasons why it did not believe it had violated its obligations under EU law. (see reply by clicking on the pdf below)

“The Commission has carried out a thorough analysis of the legal issues at stake in this case on the basis of the information it gathered, including the report of the Auditor General of April 2010 and Malta’s reply to the Letter of Formal Notice dated 4 August 2010,” the government said,

The government said the Commission’s confidential Letter of Formal Notice had unfortunately been leaked to the press and that this had resulted in much speculation on the contract and its award. On its part, the government had declared that it would respect the confidentiality of the infringement proceedings and that it would only publish its response to the Commission following the Commission’s conclusions on the case.

EU ONLY INVESTIGATED POSSIBLE BREACH OF ITS RULES - PL

The Labour Party in a reaction said the EU had not investigated the irregularities which it had mentioned, or the irregularities mentioned in the report by the Auditor-General, because that was not its role.

The European Commission had not investigated how the change of the law on emission levels was made on the instigation of BWSC so that it could be eligible for, and eventually win, the contract.

Neither had the EU investigated how the BWSC agent in Malta boasted that he had good contacts at Enemalta and political circles.

It had not gone into how the BWSC agent had also been the agent of consultant company Lahmeyer International, which had worked with BWSC in Iraq but was then selected as an independent consultant to evaluate the technology of the bids and recommended BWSC in Malta.

The PL said the EU had not investigated how the government first decided that the power station extension should be gas fired, but then opted for heavy fuel oil.

The EU, as explained in its June 4 letter, had only investigated possible breach of EU rules.

The PL said it never built its case on the basis of the EU reaction, but the facts which emerged from the contract and which the government was trying to hide.

EU DECISION SHOWS PL CAMPAIGN WAS 'SMOKE' - PN

The Nationalist Party said the EU decision confirmed that the campaign waged by the Labour Party was just ‘smoke’. The EU decision, it said, followed closely on the declaration by the Auditor-General that had he found any corruption, he would have gone straight to the police.

The PN noted that the PL had long boasted that it had been the one that published the Letter of Formal Notice issued by the EU when proceedings were launched, yet it was now claiming that it never built its case on the basis of the EU reaction.

This, the PN said, was misleading, since the PL had been building its arguments on the basis of points in the EU letter.

Now that the EU had investigated the points raised by the PL and found no violation of the law, the PL was trying to minimise what the EU had decided, the PN said.

pdfs below show the EU's Letter of Formal Notice and the government's reply. (pls click)

See also:

http://www.timesofmalta.com/articles/view/20100801/local/brussels-seeks-clarifications-over-power-station-tender