The government is refusing to comment on what action it will take if it is found guilty by Brussels of breaching public procurement directives in the tender for the Delimara power station extension contract.
“The government has replied to all queries and requests for information required by the Commission,” a Finance Ministry spokesman said when asked whether the contract could be terminated or whether Malta could end up paying hefty fines.
Although it is highly unlikely that the power station extension contract will be cancelled because there may be “overriding reasons relating to a general interest”, Malta can expect to pay hefty penalties if it is found to be in breach of European procurement directives, according to the EU rule book.
However, the Remedies Directive also makes it clear that alternative penalties to stopping the contract had to be “effective, proportionate and dissuasive.”
The issue came to the fore last week when Labour leader Joseph Muscat revealed the contents of a letter the Commission sent to government last June in which it accused Malta of breaching various EU directives.
The government kept this letter under wraps and it was only The Sunday Times that revealed its existence earlier this month.
Brussels said that increasing emissions thresholds just before the tender was adjudicated gave bidders with diesel engines an advantage over another bidder that proposed a gas-fired plant.
The Commission also said failed bidders were not informed that the tender was awarded, effectively denying them the right to appeal within the stipulated timeframe.
The Commission’s notification is the first step in what could be a long-winded process that may also end up before the European Court of Justice.
The power station extension contract was awarded to Danish company BWSC, which will supply eight diesel engines.
Meanwhile, Labour MEP Louis Grech tabled a number of parliamentary questions, asking the Commission for an update on the matter.
Last Friday, Mr Grech asked the Commission why it took so long to initiate proceedings given that the longer it took the more complications would arise for Malta.
He also asked the Commission whether the government responded within the stipulated time, and when it was expecting to deliver a decision.
ksansone@timesofmalta.com