Former Enemalta chairman Tancred Tabone and his consultant, Frank Sammut, sabotaged the privatisation of the corporation’s oil storage facility in which they had an undeclared private interest, a court heard yesterday.
“Tancred Tabone and Frank Sammut, more so Frank, but with the full blessing of Tancred, were basically sabotaging the process,” the chairman of the privatisation unit, Emanuel Ellul, told the court yesterday.
He said that, in his experience at the helm of the privatisation unit, there was never a process where there had been so many obstacles.
“There are always some obstacles to privatisation because, often, people in management start making considerations about their own positions but I can say with a clear conscience that there has never been a privatisation process that faced so many obstacles as this one,” Mr Ellul said to a question by the prosecuting officer, Police Inspector Angelo Gafà.
I can say with a clear conscience there has never been a privatisation that faced so many obstacles as this one
He was testifying in the case against businessmen Tony Cassar and Anthony Portelli who are pleading not guilty to bribery, money laundering and being accomplices in a crime committed by public officials.
The case hinges on their ownership of the bunkering company Island Bunker Oils, in which both Mr Tabone and Mr Sammut were silent partners while they served as Enemalta chairman and MOBC CEO respectively.
The company received substantial business from MOBC while the two sat on the management.
Moreover, Mr Ellul testified, when the privatisation of Island Bunker Oils started in 2003, the two signed a note declaring they did not have a conflict of interest.
The case is not directly linked with the oil scandal that broke before the election, in which Mr Tabone and Mr Sammut stand charged with corruption for allegedly taking commissions on oil bought by Enemalta.
However, Mr Ellul explained yesterday that the full significance of Mr Tabone and Mr Sammut’s sabotage only struck him when their names were mentioned in connection with the scandal and their silent partnership in Island Bunker Oils was revealed earlier this year.
When he found out, Mr Ellul sought legal advice and was told he should go to the police with the information, which he did.
Mr Ellul yesterday exhibited several documents which he used to sustain the line that Mr Tabone and Mr Sammut were working against the privatisation.
In one incident, Mr Ellul said his unit had instructed both officials to make sure to insert a clause in any new bunkering contracts that allowed MOBC to unbind itself in a matter of months, in view of the imminent privatisation.
Instead, a clause was inserted in one of the contracts signed after these instructions were issued that did the exact opposite: it gave a bidding company the opportunity to free itself from the contract with a three-month notice, while MOBC had no such option.
The final straw, however, came towards the end of the privatisation process, when the unit was about to conclude with a bidder.
Mr Tabone had asked to be informed of the whole process and, behind the privatisation unit’s back, commissioned a report from Mr Sammut looking into whether MOBC should be sold to private interests.
In his report, Mr Sammut argued Malta would not be able to meet its EU obligation to have adequate reserves of oil in case of emergency if it sold MOBC.
The document was given to then infrastructure minister Austin Gatt, responsible for Enemalta, who, in turn, passed it on to then finance minister John Dalli.
Before the report was drafted, the privatisation unit sent its own document to Mr Dalli, signed by all the members and the secretary, detailing the obstacles laid by Mr Tabone and Mr Sammut.
When Mr Sammut’s report reached the Finance Ministry, a meeting was convened for all government stakeholders involved in which the politicians decided to end the privatisation.
“There were about 20 people at that meeting. There was Minister Dalli, responsible for the privatisation unit, Minister Gatt for Enemalta. There was Tancred Tabone and there was us,” Mr Ellul said.
“In the end, I did not manage to counteract the report,” he said, before adding, angrily, that if he knew then what he knew now, even on a technical level, there would have likely been a different outcome. Mr Ellul argued that the objection made by Mr Sammut in his report was baseless.
“Even then, I had pointed out the Government could have entered into an agreement for a bidder to store oil for Enemalta. But there are other options.
“For instance, I know that, in later years, Malta had some provisions to have reserves in Holland.
“Often, it’s just a case of having an agreement (with another country or bunkering firm)... a piece of paper,” Mr Ellul said.