Labour MP Evarist Bartolo raised questions this evening over how Lehmayer International had been contracted by Enemalta to provide technical consultancy on the power station extension contract despite having previously worked with eventual winning bidder BWSC.
Speaking at a meeting of the Public Accounts Committee which continued to discuss the Auditor-General's report on the power station contract, Mr Bartolo repeatedly observed that Lehmayer and BWSC had together built three power stations in Northern Iraq (at the time of the food for oil programme under Saddam Hussein).
Subsequently, Lehmayer offered its services to Enemalta s a consultant for the power station extension contract. Its offer was turned down, yet a month later, Enemalta itself engaged Lehmayer for that purpose, by direct contract without a call for tenders.
Mr Bartolo made a series of questions to the Auditor-General over whether it had resulted to his office during its investigations whether Enemalta had, before engaging Lehmayer, knew that it was blacklisted by the World Bank for refusing to give information on corruption cases.
He also asked if it had been known that Lehmayer and BWSC had previously worked together, if it had been know that they had had the same agent in Malta, and if any explanation was given over Enemalta's sudden u-turn to engage the company.
The Auditor said his office had information that Lehmayer was still blacklisted by the World Bank and that it had worked with BWSC on the Iraqi power stations. Such information could be found on the World Bank and other websites although this did not fall within the terms of reference of the Audit office's investigation into the Delimara power station contract.
It had also been confirmed that Mr Joseph Mizzi had been local agent for both Lehmayer and BWSC although he was no longer the former's agent when the tender was being considered.
It was not known why Enemalta had refused Lehmayer's initial offer, and then engaged it by direct order a month later. However, Enemalta officials had said they felt safe to engage Lehmayer because it had also worked for the regulator, the Malta Resources Authority.
Mr Bartolo asked if the Contracts Department agreed with the way how Enemalta selected Lehmayer.
The auditor said such approval was not needed. However he confirmed that no calls for tender was made.
Replying to further questions by Mr Bartolo, the auditor said that in a tender procedure such as this, which was major and took several months, it was always better, in the interests of transparency, to avoid direct orders and go for competitive bids.
He did not know if EneMalta even looked into the relationship between BWSC and Lehmayer.
Mr Bartolo said it would only have taken a simple Google search.
Mr Bartolo asked if Lehmayer had approved the BWSC emission abatement equipment even though this was experimental, and had relied solely on BWSC documents since there was no track record. He also pointed out that the contract requirements were for 'tried and tested' equipment.
Replying, officials from the audit office acknowledged that Lehmayer had depended only on BWSC data and that the combination of equipment offered by BWSC was still a prototype. There had been reliance on plausibility tests.
Mr Bartolo said plausibility meant equipment may either work or it may not. This was hugely different from 'tried and tested equipment' which the contract required. This was not the 'best available technology' which the tender conditions required, but, in anything, technology under development.
How, therefore, could this be acceptable?
Audit office officials said that under procurement rules,it was the criterion of the most economically advantageous bid which was given the most importance and the definition of best available technology was not given.
Mr Bartolo wondered how serious it was to call for best available technology and then not opt for it.
He asked if the BWSC prototype would be tested elsewhere before it was installed in Malta.
The audit office officials said they had no information but this did not result to them.
Mr Bartolo asked if Mr Mizzi had been asked by the audit office whether he was involved in the choice of Lehmayer.
The auditor said Mr Mizzi had said he was not involved.
In another part of the meeting, Mr Bartolo noted that Mepa had warned Enemalta that changing the legal notice on emission levels would impact the tender specifications.
He asked if it had resulted that in order not to exceed the emission limits in force before the law was changed, the power station extension had to be formed of a combined cycle gas turbine.
The auditor said that had to be checked.
Mr Bartolo said this was in the electricity generating plan drawn up by Enemalta yet Enemalta then broke its own policies when it decided to change the emission regulations.
Mr Bartolo asked whether Mr Mizzi had said what role he had in the changes to these regulations.
The auditor said that Mr Mizzi when asked had said he had no role.
Infrastructure Minister Austin Gatt asked the auditor to confirm that no appeals had been made in the various stages of the tendering process,
The auditor confirmed that no appeals were made.
Dr Gatt said Israeli company Bateman, which was one of the short listed bidders, never filed any appeals against BWSC in the various stages of the tender proceedings, but complained publicly later.
He noted that while Bateman later complained that if was not informed by Enemalta about the results of the evaluation (and thus could not appeal in time.) However, the Israeli company never actually said that it did not know the results. Indeed, Dr Gatt noted, the website which featured the adjudication results included hits from Israel.
His information , Dr Gatt said, was that there was an argument between Bateman and its representative over whether an appeal should be filed but none was filed because of differences over who would pay for it.