(Adds Enemalta reaction)

The Infrastructure Ministry insisted today that the contract for the power station extension was awarded to the lowest suitable bid, and the new plant would conform to EU environment norms.

Reacting to a motion in Parliament announced by the Opposition (see separate story), the Ministry said Infrastructure Minister Austin Gatt looked forward to the debate as it would show that everything was done regularly and the technology that was selected would keep power tariffs at the lowest levels possible.

This was confirmed by the fact that no appeals were made by the bidders throughout the process. Instead, those who lost out found Opposition leader Joseph Muscat to speak for them, the ministry said.

Replying to various points in the Opposition motion, the ministry said:

Current generation capacity is sufficient and there is no tardiness in the planning and implementation of the power station extension; Malta's laws on emissions by large power generation plans meet EU norms and no changes were made to reduce emission thresholds from what was normal in the EU and the world;

The costs requested to convert the plant to gas operation, if that was ever needed, were considered during adjudication, when it resulted that the selected technology was the cheapest one and hence the one with the least impact on electricity bills;

The costs associated with the storage and export of the power station wastes were similarly considered;

The filters against emissions were of a proven design and not an experiment.

The Ministry said that the fact that the Opposition repeatedly condemned Dr Gatt over the choice of tender ignored the fact that tenders were not chosen by ministers but by technical experts. The Opposition interference in technical choices reflected the Opposition's real thinking on the government's role in administrative and technical matters, the ministry said.

ENEMALTA REACTION

Enemalta in a statement denied that the chosen equipment had higher operating costs than gas operations, thus forcing an increase in power tariffs.

"The plant selected has lower operating costs to the gas turbines offered. The financial analysis carried out on generation costs, taking the capital expenditure and all operating costs into account, for the Bateman gas turbines is euro cents 16.8/kWh whereas financial calculations for the BWSC diesel engines, which also include the additional costs of waste disposal and the cost of conversion to gas, is of euro cents 12.4/kWh. All this information is public."

The corporation also denied that there is a power capacity shortage. "The current capacity is well above the demand and when the new plant is installed, which will come into operation in 2011, before the expected demand exceeds supply. It is foolhardy to incur the expense of an additional generating capacity much earlier than it is actually needed especially since it is consumers or tax payers who would have to pay for the unnecessary excess."

Enemalta insisted the new plant met EU environmental standartds.

On conversion to gas, it said that while it specified that all plant offered should be able to operate on gas, there is no suitable gas supply in Malta.

"The future introduction of such supply may not be feasible or economically viable. The other gas turbines which were offered carry with them additional costs to operate on gas. They require gas supply conditions which are very particular and would require additional investment in gas compression equipment. Notwithstanding, even after taking into account the additional cost of conversion of the diesel engines to gas in 2015, which is the earliest possible date that gas could be available, the operating costs per kWh of the diesel engines will be 26% lower than the operating costs of the gas turbines."

On the space at Delimara, the corporation said the diesel engine plant would generate 144MW in summer and would occupy 4900m3 compared to the 115MW generated by the gas turbines occupying 3800m3. There remained 6600m3 on the site which could be used for the future phases of Delimara development.

"The evaluation and adjudication teams were comprised of senior Enemalta and other public service officials, who carried out the adjudication and made their recommendations in complete independence of both the Enemalta Board of Directors and the Ministry," Enemalta said.