On October 12, 2013, Enemalta announced that it had selected Electrogas Malta as the preferred bidder to build a new gas power station and supply electricity to the corporation. Electrogas is a consortium made up of the German firm Siemens, Socar of Azerbaijan, the UK’s Gasol and GEM, a group of Maltese investors.

A statement published by Gasol on the London Stock Exchange on May 14, 2014, stated: “As part of these arrangements, it is expected that Electrogas will enter into various agreements… for a consideration of €30 million in cash.

“The total cost to Electrogas of developing the project over the next 24 months is expected to be around €370 million, which it is envisaged will be financed 80:20 in debt and equity respectively by Electrogas.”

We now know that the €30 million cash consideration was never paid to the government or Enemalta.

The said €30 million was meant to finance the reduction in tariffs for families that came into effect this year.

It has now also emerged that the auditors of Gasol Plc have issued a clear warning to all those seeking to do business with it.

On page 20 of the 2014 audited accounts of Gasol, one finds the following statement: “The group does not currently hold sufficient cash or liquid assets in order to meet its commitments as they fall due for the next 12 months.”

Furthermore, on page five of the same report under the heading ‘Principal risks and uncertainties’ there is the following warning: “The company is likely to be required to obtain significant capital in the future. There is no assurance that it will be able to raise such capital when it is required or that the terms associated with providing such capital will be satisfactory to the company”. A company that cannot meet its commitments is generally considered to be insolvent.

The government tendering process includes provisions to weed out bankrupt or insolvent companies. Public procurement regulations allow government entities to ask companies bidding for government works to supply documents to prove their financial standing. These documents may include balance sheets and financial statements to prove the company’s turnover.

While the procurement regulations allow companies forming part of a consortium to share their resources and expertise and to some extent rely on each others’ capabilities, each company must prove that “it will have at its disposal the resources necessary, for example, by producing an undertaking by those entities to that effect”. Nonetheless, a bankrupt company, irrespective of the financial strengths of its consortium partners, is not allowed to tender.

Were the provisions to ensure the financial solvency of the bidders omitted from the selection process?

Although Gasol is not technically bankrupt, is it considered by government to be a solvent company?

There are clear and unequivocal warnings from the auditors that they might not be in a position to honour their commitments.

The obvious question that arises out of this is whether this warning was factored in the bidding evaluation process and if it was, what weight was it given?

Now we all know that normal tendering procedures were curtailed as government strove to reach the unrealistic deadline of delivering a power station in 24 months.

According to Joseph Muscat, the timely completion of the power station project was critical towards the implementation of the promised 25 per cent electricity tariff reduction for business to come into effect in March 2015.

That target was not reached and five months from the deadline we do not even have a start date for the works, let alone completion.

And to top it all off, Gasol, one of the main shareholders of the consortium to which government is committed towards buying electricity (also without a tender) for 18 years, has its own auditors issuing a warning that it does not hold cash or assets to meet its commitments even before commencement. So much for throwing tendering processes to the wind for the sake of expediency.

What led to this mess is still a mystery. Were the provisions to ensure the financial solvency of the bidders omitted from the selection process? If so, who took the decision to remove this safeguard from the tendering process?

What was the minister’s involvement in the selection process? Who was responsible for assessing the financial position of the members of the bidding consortia? Will the minister be assuming any responsibility for any shortcomings on the part of his appointed adjudicators?

Is Electrogas still committed to this project? Is Electrogas in a position to raise the €370 million necessary to complete this project given that Gasol, one of its main shareholders, does not seem to be in a position to do so?

Why has the €30 million deposit not been paid? Why is there no commencement date yet for the project?

The questions to these answers are not yet publically available because the government has to date repeatedly refused calls to publish information related to the bidding process for the new power station. To date, not a single contract has been published, not a single extract thereof has been tabled in Parliament.

This week I tabled a number of parliamentary questions on this matter. I hope that the government will provide the country with satisfactory answers to the legitimate questions begin asked.

This matter is of grave concern. The Opposition is not levelling any accusations at this stage. We are being prudent and asking for the facts. We will draw our conclusions once the facts are known.

However, in the meantime, the public is forming its opinion on this project and on the government, based on the available information, or rather lack of it.

By refusing to fully disclose the facts, the government foments speculation on this project: not only on the timeliness aspect of the project but also on why and how certain members of the selected consortium were approved.

Mario de Marco is deputy leader of the Nationalist Party.