The Auditor-General has found that fresh allegations by the opposition on the granting of the tender to BWSC for the Delimara power station extension were unfounded.
The Auditor’s supplementary investigation was ordered by the House Public Accounts Committee following concerns raised by the opposition in view of new information, particularly the fact that some of the bidders had a common parent company.
The report said that of the seven concerns listed, two dealing with the relationship between key players and with a 2005 loan taken out by Enemalta Corporation respectively, were deemed to bear no impact on the tendering process.
Two other concerns, on changes allegedly made to accommodate a particular bidder and on conflicts of interest, had already been extensively reported upon in the original April 2010 report.
Key issues identified
The Auditor, however, identified key issues in the remaining three concerns.
One deficiency that transpired was Enemalta’s consistent recourse to direct orders on an ongoing/ repeat exercise and the corporation’s surpassing authorised financial capping.
The Auditor said “a second concern was the fact that in public procurement of entities dealing in water, energy, transport and postal services, public contracts regulations empowering authorities to control economic operators’ participation in tendering on the basis of the latter’s professional (mis)conduct were not applicable under the prevailing legislation”.
Another potential concern, he noted, was that a partner of the legal firm representing BWSC’s local representative had previously been Enemalta’s legal adviser for 20 years. This same firm, the report says, also (separately) represents BWSC locally.
The Finance Ministry said the Auditor found that the various allegations made by the opposition were rhetoric in nature and the facts claimed by Labour had no bearing on the granting of the tender.
In his report, the Auditor said that “BWSC’s offer to EMC (Enemalta), which offer ended up as the successful bid and as such the basis of the contract being executed, uses Warsila diesel engines and not MAN’s.”
He added that none of the mechanisms in question empowered the competent authorities to eliminate sub-contractors on the basis of illegal activities and/or professional misconduct.
Labour said the Auditor had remarked it was a serious shortcoming that the contract conditions were drawn up in a way that made it impossible for the authorities to stop BWSC from having as sub-contractors companies, which, it said, had all been found guilty abroad of having bribed ministers or government officials in order to win contracts.
The full text of the reports can be found at http://c256.r56.cf3.rackcdn.com/20ccf58a2e1a1e832b3e23d2fb07ab1d1946231637.pdf