Energy Minister Konrad Mizzi this evening confirmed in parliament that an independent board is being set up to consider any appeals by bidders in Enemalta's call for expressions of interest for a power and gas purchase agreement.

The decision was welcomed by Opposition MP Tonio Fenech, who said that the Opposition had been calling for this remedy because having the bidders go to court to only be refunded their costs if their claim was upheld had been insufficient.

Mr Fenech asked, however, why the appeals procedure was not being referred to the Contracts Committee, which had experience in this matter and was respected.

Once the government was setting an ad hoc committee, how would it operate, what technical competence would it have, and what remedy would be given if a bidder's appeal was upheld?

Mr Fenech also asked how the government had decided that the proposed power and gas purchase agreement was exempt from the EU's procurement regulations. The call for expressions of interest, he said, involved more than procurement since the supplier would have to build an infrastructure to provide its service, in what was known as a mixed contract. It involved the building of a power station, a re-gassification plant and storage tanks, among others.

The EU directive said that in the building of an infrastructure, the procurement directive applied. In mixed contracts, when there was doubt, the procurement regulations applied, more so as one did not know what would happened to the infrastructure once the contract expired.

The government, Mr Fenech, was in time to remedy matters before it made a serious mistake.

Should it be found that the government was breaking EU regulations, any bidder could protest to the EU, which could then block the whole process, Mr Fenech warned. 

Mr Fenech also asked whether the government was still convinced that this contract would be realised within 18 months and whether some of the bidders had expressed doubts.

He also asked if the project had been discussed with the EU and whether the government was possibly going back to a gas pipeline instead of large storage tanks.

He noted that the document made no link with a reduction of the tariffs of electricity and water. Furthermore, before the election, the government had promised a 10-year fixed price gas purchase agreement, but the document spoke of a five year agreement. What would happen after the five years, would the tariffs rise to compensate for lower prices in the first five years?

In his statement, Dr Mizzi said there had been 19 bids for the expression of interest, including some global companies which he listed.

He said that while the bids of expression of interest were being considered during the summer, Enemalta would also continue studies which would guide the chosen bidder. Talks were being held in this context with Mepa, Transport Malta and the Occupational Health and Safety Authority.

A project description statement and geo-thechnical studies were also being made.Dr Mizzi said a legal notice was being issued to allow for the setting up of the appeals board, which would be independent and autonomous. Enemalta was committing itself to abide by its decision.

Replying to questions, Dr Mizzi said the government was committed to sticking to its electoral timetable to reduce tariffs.

He said the government would not do what the previous government had done during the BWSC process, when it changed the environmental law half-way through the tendering process and there was controversy throughout the tendering and commissioning process.

This government, he said, was happy with the pick-up to its call for expressions of interest, having expected about 10 bidders.

He said the government would maintain world class standards and would also carry out a new environment impact assessment. 

He said a request for detailed proposals would be made next month. It would close in July and parallel talks would be held with the bidders.

On the appeals process. he said a right of appeal would be available throughout the process. Since this contract was exempt from the procurement regulations, it could not be referred to the public procurement board. On the advice of the Attorney General, an independent appeals board was being set up.

The process would be temporarily suspended if there was an appeal and if an appeal was upheld the bidder would be reintroduced in the process.

On the gas pipeline, Dr Mizzi said the PL never had a problem about having a gas pipeline and studies were continuing. If the EU made funds available, the project could be considered, but this involved several years.

On pricing strategies, Dr Mizzi said the call for expression of interest spoke of a 'minimum' five years fixed price agreement and various pricing models were being considered.

He promised that all stakeholders including local councils, the fishing community and residents' associations would be involved in the project.

See also No appeals board for first part of power station selection procedure - http://www.timesofmalta.com/articles/view/20130425/local/no-appeals-board-for-first-part-of-power-station-selection-procedure.466944

 

 

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