Power station: Bateman would still have needed to use liquid fuel in 2012 - Gatt
Infrastructure Minister Austin Gatt said in Parliament today that even if Bateman equipment had been selected for the power station extension, it would have still needed to use diesel or other liquid fuel when it was commissioned in 2012.
Furthermore, choosing Bateman over BWSC would have cost the country €30m more per year (in production costs), even if the equipment of either company used the same fuel.
Speaking at a meeting of the Public Accounts Committee, where he repeatedly asked the Auditor-General to confirm his statement, Dr Gatt said the tender specifications had been clear that the generating equipment in all cases had to operate on either gas or liquid fuel.
Since the infrastructure for gas operation would not be ready at least until 2015-2016, should Israeli company Bateman have been selected, it too would have had to operate using liquid fuel in 2012.
Dr Gatt asked the auditor to confirm that BWSC were cheaper than Bateman even when conversion from fuel to gas was considered.
An official from the audit officer confirmed that was the case.
Finance Minister Tonio Fenech said it was always the government's intention for the power station extension to operate using gas, but that was not possible before 2015 and 2016 because the necessary infrastructure would not be in place before that. That was why the tender specification laid down that the new equipment could use both gas or other fuel.
The Audit Office officials agreed.
Mr Fenech said both the liquid fuel and gas options met the EU emission standards and the government therefore retained the option of choosing between gas and fuel, once the infrastructure was available. A major factor would be cost.
Dr Gatt asked the Auditor-General to confirm that the BWSC offer was some €296 million cheaper than Bateman, all considered including plant costs, maintenance for five years, disposal of waste and conversion from liquid fuel to gas.
The Auditor-General confirmed.
He also asked him to confirm that BWSC production costs were 3.4c per unit cheaper than Bateman.
The officials confirmed.
Dr Gatt said this meant that had Bateman been selected,the Maltese people would have been required to spend €30 million more per year than the BWSC plant, using the same fuel.
This, he said, was equivalent to the increase in the power tariffs announced last January. But whereas that was strongly criticised, is seemed for somebody that it was OK to incur the extra cost to engage Bateman.
Evarist Bartolo (PL) said the new equipment could not use gas because the government had not built its infrastructure on time, despite having shown interest and issued a call for tender in 2006. It thus brought itself in a position where it had no choice.
Dr Gatt said it was a call for expression of interest for the supply of natural gas which was issued, and it was found that this was not economically viable. However, studies on the laying of a pipeline were continuing.
Mr Bartolo said the fact remained that the Cabinet had decided that the power station was to have used gas. Then the decision was changed to heavy fuel oil.
Mepa in March 2006 told Enemalta that in order to meet EU emission levels, the new generation plant had to be gas fired. But rather than install the necessary infrastructure for the provision of natural gas, the emission threshold were subsequently changed by legal notice. Gas prices, Mr Bartolo said, were falling and would mean lower utility tariffs.
Finance Minister Tonio Fenech said the government still wanted to use gas. The issue ultimately was financial. Gas could not be bought overnight and the infrastructure took years to be built. Yet the option to use gas remained. Furthermore, the interconnector option - linking Malta to the European power grid - could ultimately be even cheaper.
Mr Bartolo said it would cost €27 million to convert to gas.
Dr Gatt said the BWSC option was still cheaper than Bateman.
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Edward Mallia
Dec 14th 2010, 22:52
He also asked him to confirm that BWSC production costs were 3.4c per unit cheaper than Bateman.
The officials confirmed.
Dr. Gatt said that this meant that had Bateman been selected, the Maltese people would have been required to spend €30 million more per year than the BWSC plant using the same fuel.
The NAO Report p.46
The end result was one wherein the unit cost per kWh of electricity produced through DECCs
(the BWSC engines) burning gasoil was HIGHER (my emphasis) than that for CCGTs (Bateman) burning the same fuel.
Can anyone- Minister Gatt, the Auditor General, the unamed expert used by the Auditor, NAO officials, Enemalta engineers, or even Opposition members of the PAC-- reconcile these statements?
Are we discussing the same NAO report when it is said that it is cheaper to convert the BWSC engines to natural gas at €27 million rather than the Bateman turbines which do not need any 'conversion' ?
leo attard
Dec 14th 2010, 20:49
Dr Gatt, I would take your word for it but after you told us you would not increase utilities if oil went below $80, which it did and you failed to keep your word, well let's just say I will take your word -- not with a grain -- but with a whole bag of salt!
Charles Zammit
Dec 14th 2010, 18:45
The question I have been harping on for a long time now is 'why has the infrastructure needed for gas delivery to these islands been ignored?' Such a set-up would have helped clean the air we breathe too since many vehicles that currently run on polluting fossil fuel would have been able to be converted to LPG operation. In Italy they boost of Ecobuses. Why cannot we in Malta come close to what our European partners are doing for their health safety? Why was Malta not connected to the rest of Europe for its gas supplies? Why has the government failed even in such a basic matter?
patrick zammit
Dec 14th 2010, 18:36
If the conditions of the tender were changed (ie from gas to oil) during the tender adjudication, why wasn't the process stopped and a new tender issued with the new conditions so that anybody who could offer an oil fired power station could be in a position to do just that? As far as I know, one cannot change the conditions midway for obvious reasons.
l fenech
Dec 14th 2010, 16:33
U jekk l'anqas ma nafu xejn fuq il-BWSC kif int pront biex tikkritika lill-Bateman meta had ma ra it-tender u twarbet mal-ewwel biex it-tender jehduha il-BWSC. Hallina Aust.
N. Buckle
Dec 14th 2010, 13:40
If it was not possible for the plant to operate using gas before 2015 - 2016, how is it that Cabinet had recommended the procurement of a gas plant years ago? How is it that yerars ago Government had passed legislation about the quantity of emissions? Is it because the Cabinet and the Government do not know what is going on despite the hefty increase in wages, or are they giving these reasons now because of the allegations that are being addressed to Ministers? Whatever the reason we do not believe you any more.
P.Cassar
Dec 14th 2010, 13:25
BUT DR GATT IS THE 'ACCUSED' , HOW COME HE IS THE PROSECUTOR AND JUDGE ALSO !!!!!!!!!!!!!!1?????
IN WHICH DEMOCRATIC COURT ARE VERY IMPORTANT WITNESSES BARRED FROM TESTIFYING BY THE 'ACCUSED' HIMSELF???????????
JUSTICE THWARTED REPEATEDLY.
John Micallef
Dec 14th 2010, 15:43
In a banana republic named MALTA my friend!
Helen Vella
Dec 14th 2010, 13:02
Dr Gatt - isma mill-maggoranza tal-Maltin (Nazzjonalisti u Laburitsti) u dabbar rasek issa. Imbasta tkun lest li ggor ir-responsabbilta' ta' dak kollu li ghamilt.
N Cutajar
Dec 14th 2010, 13:02
Xi hlew issa kollha saru health freaks u addio il kontijiet.
Jean Paul Galea
Dec 14th 2010, 13:45
Yes maybe a health freak if i want to put my electricity bill i get a solar panel on my roof. Having a power station killing people all around with noxious gases gives you no option but to suffer the consequences. The problem with gas is that they don't have the infrastructure. The major problem is planning you don't buy a power station and then plan infrastructure. Lets face it PN had 20 years to plan for that and they didn't and for the record I am a nationalist but not a brainwashed one.
Joseph Cauchi
Dec 14th 2010, 12:26
.
I am astonished when some commenters bring up the issue of “health” reasons in this BWSC saga and do not complain about the motor vehicles’ emissions which are far greater and cause more damage to our health.
Should we therefore ban ALL motor vehicles in our island and return to the days of the KAROZZINI?
JC.
tony fava
Dec 14th 2010, 12:07
Undoubtedly cheaper DR Gatt. That is at which price you value human beings' health or lives
C Muscat
Dec 14th 2010, 12:02
The problem is that the tender should have been re issued as open tender to all and sundry.
Joe Vella
Dec 14th 2010, 12:43
C. Muscat and Jean Paul Galea, before you comment I would suggest that at least try and comprehend what you had just read and then comment. Dr. Gatt said and the Auditor General confirmed that if Bateman bid was chosen it would still have to operate the facility on the same fuel as BWSC at a higher cost.
"Infrastructure Minister Austin Gatt said in Parliament today that even if Bateman equipment had been selected for the power station extension, it would have still needed to use liquid fuel when it was commissioned in 2012.
Furthermore, choosing Bateman over BWSC would have cost the country €30m more per year (in production costs), even if the equipment of either company used the same fuel."
John Micallef
Dec 14th 2010, 13:06
The only thing we are nothing is that this time they sounded like a duo,not like last time, were the AG felt he was interogated.
WHAT HAS CHANGED in 2 weeks or so????
We want police or courts to investigate, not some one without executive power.
Jean Paul Galea
Dec 14th 2010, 11:35
Its not what is cheaper Mr Gatt but what is good for the heath of the citizen. Check the Cancer statistics in marsa and then the cost of treatment and rework your equation of cheaper
A. Zahra
Dec 14th 2010, 15:30
Glad to note that you rejoice when paying higher w & E bills. Come on Bateman.