A former Enemalta board chairman tasked with advising on oil procurement has contradicted the reason given by Infrastructure Minister Austin Gatt for his replacement in 2005, saying he was probably “forgetting”.
His statements came in reaction to comments made by Dr Gatt last week in relation to the reason why Joseph Falzon was replaced eight years ago.
The board had been set up by Dr Gatt in January 2005 to advise Enemalta on hedging the purchase price of oil imports.
It continued to operate until the middle of 2007.
The academic ended up in the middle of the ongoing debate about the Enemalta oil scandal when Labour MP Evarist Bartolo said Dr Gatt had replaced Prof. Falzon as chairman after he asked for the committee to have two graduates to do research on the oil market and the exchange rate.
Mr Bartolo argued that people involved in the committee felt they had been used at the time, in light of recent revelations on questionable oil deals.
Addressing Mr Bartolo’s questions, Dr Gatt argued that Prof. Falzon, who is dean of the Faculty of Economics, Management and Accountancy at the University of Malta, had hired the graduates in breach of recruitment procedures.
But Prof. Falzon insisted to The Times he could not have done what Dr Gatt claimed because he had absolutely no executive powers. “Perhaps the minister is forgetting, because this was a while ago, but I had no executive powers, so I simply could not have recruited anyone, let alone illegally,” Prof. Falzon said.
He said that the only graduate ever recruited in this respect was hired by Enemalta’s then financial director, after he was replaced as chairman in November 2005.
Prof. Falzon said he had met Dr Gatt around July or August 2005 and asked to have two graduates. According to Prof. Falzon, he was told that this would not be acceptable and that, if he disagreed with this line, he should resign as chairman.
There was no immediate outcome to the meeting but Prof. Falzon said then Enemalta chairman Alex Tranter called him around October of the same year and told him Roderick Chalmers would replace him as chairman of the advisory board and Gordon Cordina would join as a member.
He said that he had sent a letter to the Office of the Prime Minister in November 2005 protesting about the move but received no reply.
Asked for a counter-reaction, Dr Gatt said his recollection was different but argued that this was a minor issue in the context of the allegations levelled at him by Mr Bartolo.
Effectively, the advisory committee was in place to advise on a hedging policy and other purchasing strategies under consideration by the corporation at the time.
In practice, the committee had no impact on the actual tendering process.
The hedging instruments, in fact, are negotiated with financial institutions separately, and independently from, the oil contracts entered into by Enemalta with suppliers.