The Malta Resources Authority has defended its decision to use the services of a German consultancy firm blacklisted by the World Bank, insisting the law did not allow it to blacklist companies at the tendering stage.
The authority made use of Lahmeyer International's services between May 2007 and December 2009 for "technical, regulatory consultancy related to the energy interconnector", a spokesman said.
The company is blacklisted by the World Bank because of corrupt practices overseas. In 2003, Lahmeyer was convicted in Lesotho for paying bribes through an intermediary. Subsequently, in 2006, the World Bank blacklisted the company for seven years.
The MRA skirted questions on whether and when it became aware of Lahmeyer's blacklisting by the World Bank and instead pointed to existing regulations.
"The Malta public contracts regulations do not allow for the blacklisting of any economic operator during the tendering process," the spokesman said, insisting the MRA had no contractual obligations with the company.
Lahmeyer's name was first mentioned by Labour MP Evarist Bartolo in relation to the controversial Delimara power station extension after the company was chosen by Enemalta to do a technical analysis of the bids.
In his investigative report on the award of the multi-million euro contract to Danish company BWSC, the Auditor General revealed that Lahmeyer had first approached Enemalta to carry out an evaluation of the technologies proposed when the bids were still classified confidential. Enemalta initially turned down the offer but one month later engaged Lahmeyer by direct order to perform a technical analysis.
The German company ranked BWSC's technology in third place but its evaluation was crucial to keep the company in the running despite having submitted prototype technology, which could have technically been excluded in the first instance by Enemalta.
The Auditor said Lahmeyer's selection as an independent consultant left much to be desired because it was blacklisted by the World Bank, had been involved in a joint project with BWSC - one of the bidders it had to assess - and the agent of the company, which eventually won the tender, had also worked as Lahmeyer's agent up to December 2007.
The MRA said it dealt directly with Lahmeyer when asked whether Maltese agent Joseph Mizzi acted as intermediary.
Mr Mizzi, previously an employee at Enemalta, was in the eye of the power station storm because of a series of e-mails exchanged with Danish company bosses in which, among others, he spoke of the need to "tap higher political sources".
The Auditor said he found no "hard evidence" to substantiate allegations of corruption but pointed out that this did not mean that the content of some of the e-mails sent by Mr Mizzi was not cause for concern, "especially in so far as the way how certain restricted information seems to have been obtained from Enemalta".
He also pointed out that evidence given by certain stakeholders, especially Mr Mizzi, was evasive and sometimes bordered on non-collaboration with interviewees citing lack of memory when confronted with direct questions.