The House Public Accounts Committee this evening resumed its debate on the Auditor-General’s report about the contract awarded to BWSC for the power station extension.
At the opening of the sitting, committee chairman Charles Mangion read a letter he had received from Labour MP Evarist Bartolo asking the Auditor-General to investigate new information which had come to light since he presented his report.
Mr Bartolo said that Mitsui Engineering owned BWSC, while MANN, which placed second in the tendering process, had since 1926 been a licence holder to build BWSC engines.
BWSC and MANN had a history of working together and Mitsui would therefore have benefited whether BWSC or MANN had won the tender.
Enemalta had also signed an agreement with Sumimoto Mitsui for a hefty loan.
Furthermore, the audit and advisory group KPMG, used by BWSC, was also engaged by Enemalta to submit a report on the power tariffs.
Such links with Mitsui had also found local including the decision that the power station extension woudl be fired by heavy fuel oil, while the emissions standard was reduced.
Mr Bartolo also observed that overseas Sub-contractors engaged by BWSC were involved in corruption cases abroad which have not been declared.
The local sub-contractor, Vassallo Builders, also built the PN headquarters and employed the Enemalta chairman in one of its subsidiary companies.
Infrastructure Minister Austin Gatt said that as was the practice, this letter should be discussed in another meeting. The chairman agreed.
Mr Bartolo then referred to government decisions taken in 2006, which showed that diesel was more practical than heavy fuel to power the power station, especially because of maintenance plant. In the long run, therefore, a diesel plant would have been cheaper. He did not understand how the maintenance costs given by BWSC were accepted.
Gas would also have been cheaper, especially when one considered that €27 million would be needed to convert the selected plant to use gas.
Finance Minister Tonio Fenech said the gas option remained available. He asked the Audit Office officials to confirm that costs using the selected plant would be 4c per unit of electricity cheaper than gas.
His point was confirmed.
Dr Mangion raised questions on the maintenance costs and said that any variables would affect maintenance costs.
Dr Gatt said it was ironic that there appeared to be resentment that the government had achieved low maintenance costs for the new plant.
Mr Bartolo said it made no sense to calculate costings on just 10 years.
Dr Gatt said sensitivity analysis was made on the basis of gas being introduced much sooner, even in 2013. But in all cases, the BWSC, including all costs, still turned out cheaper.
Mr Bartolo said the calculations were not realistic. Dr Gatt said the fact was that there was no possible natural gas supply for the foreseeable future.
Mr Bartolo asked whether those who had drawn up the 2006 generation plan had therefore been stupid to show a preference for gas.
Dr Gatt said no one was stupid since the BWSC plant could in the future be converted to gas when that was possible and feasible.