EU to drop power station proceedings

The European Commission has closed its infringement procedures against Malta in connection with the power station extension project, the government announced yesterday.

The proceedings were launched last June through a letter of formal notice after the power extension contract was awarded to Danish company BWSC.

However, after conducting a thorough analysis it found no violation of EU rules and the Commission will formally propose to the College of Commissioners that these infringement proceedings against Malta be closed.

Last June the Commission had queried the procedure adopted by Enemalta in awarding a €183 million contract to increase the local generating capacity at the power station in Delimara and for a contract concerning the maintenance.

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

Brussels had queried in particular the change of some technical specifications while the selection process was already ongoing, and raised questions over whether Enemalta had observed the rules in the tender vis-a-vis the non-selected bidders.

The government replied on August 4 giving detailed reasons why it did not believe it had violated its obligations under EU law. A copy of the government’s letter, signed by Foreign Minister Tonio Borg, was sent to the press yesterday.

Among other arguments, the government explained that none of the non-selected bidders appealed or lodged any action before either the Department of Contracts or the courts to protest against the decision.

The government also explained that the four-week extension of the period for submission of the final bids and the possibility of a further session of negotiations was made applicable to all bidders, even to those whose bid was not affected by the review in emission limit values – one of the points at issue.

Though one of the shortlisted bidders, Israeli company Bateman Litwin, lodged a judicial protest in connection with the tender, it was never followed this up with legal action, the government noted.

The Commission reached its conclusion after carrying out an analysis of the legal issues at stake on the basis of the information it gathered, including the Auditor General’s report and Malta’s reply to the letter of formal notice.

The government said the Commission’s confidential letter had “unfortunately been leaked to the press” and this had resulted in much speculation on the contract and its award.

On its part, the government said it would respect the confidentiality of the infringement proceedings and that it would only publish its response following the Commission’s conclusions on the case. The power station extension tender has been a hot potato since its inception. Various allegations of corruption had been levelled after the contract was awarded to BWSC, amid further accusations that Malta chose the wrong technology.

In a statement last night, the Labour Party said the European Commission had not investigated the irregularities highlighted by both the PL and the Auditor General, since it only probed any measures that could have breached EU law.

The party said the Commission had not looked into why environment legislation had been amended on the “instigation” of BWSC to secure the contract.

The PL said several questions remained over the BWSC contract as evidenced by the Auditor General’s report.

If the government had nothing to hide over the contract, then it should stop objecting to witnesses appearing in front of the Public Accounts Committee, Labour said.