The former permanent secretary at the Resources Ministry, Engineer Chris Ciantar, has replied to comments made about him by Energy Minister Konrad Mizzi last Tuesday, saying that the ministry's involvement was in full compliance with the Department of Contracts which governed the whole process.

This is Mr Ciantar's statement in full:

Reference is made to the press conference of 21 October 2014 called by the Hon Minister Konrad Mizzi in conjunction with the process leading to a public concession for the installation of photovoltaic panels on public buildings. Given that my name was mentioned in my capacity as an ex-permanent secretary who is now in private employment, I am compelled to put forward the following points as I know them today in order to clarify some issues raised by the Minister. 

Malta is obliged to meet its renewable energy target by 2020. By this date, Malta has to generate 10% of its total energy consumption from renewable sources. In Malta, the predominant indigenous renewable energy sources are the sun, wind and waste. Energy from fossil fuels, including LNG, is not considered as renewable energy. 

The Ministry for Resources and Rural Affairs (MRRA) of which I was a Permanent Secretary was tasked with a number of projects to help Malta comply with this 10% renewable energy target. Given that land in Malta is limited, MRRA looked at the possibility of leasing out public spaces to a potential contractor willing to invest in a photovoltaic system on each space. After a thorough analysis of which public space may be utilised, MRRA used the services of an external consultant, a Big Four firm, to come up with a cost model establishing a feed-in-tariff (FIT) that would make an investor ready to invest in such a concession. The outcome of this analysis was that a FIT of €0.29 per unit should be considered. 

MRRA went through a very rigorous discussion and a re-evaluation of this cost model updating it with the cost of panels, which costs were trading downwards at a quick pace. A FIT of €0.225 per unit was judged reasonable during these analyses. Input from MRA and other government entities was sought during this process. The rate of €0.225 per unit was arrived at after considering many assumptions, including but not limited to, payroll costs so that the contractor could operate the project over the 25 year period, security systems for every public space used, rent payable to government for the use of this space, finance and insurances costs, roof restoration and/or maintenance of the spaces used, penalties for non-compliance with contract conditions, etc. It is important to point out that unlike domestic and commercial systems, this tender did not benefit from EU grants. Therefore, the FIT for this tender could not be compared to the FIT for installations benefiting from EU grants. 

With this information in hand, MRRA launched a pre-qualification document to test the appetite for this public concession and for companies to register their interest in developing 4MW (equivalent to just a fraction of the 10% target) of PV systems. This pre-qualification exercise resulted in a number of interested bidders. The adjudicating committee that was set up shortlisted the 15 bidders to 3 based on a number of pre-defined criteria that were public and transparent. The recommendations of the committee were approved by the Department of Contracts (DOC). 

Following this pre-qualification exercise, a tender was issued through the DOC and the whole process was governed by it and not MRRA. MRRA acted in full compliance with the instructions received from the DOC.  

Given that the tender was innovative, of significant risk to the investor and (as one potential bidder put it) too onerous in favour of government, only one offer was received by the closing date. The offer was received by the DOC and was adjudicated by a team of experts from university, MRRA and retired government officials. All members of the adjudication committee were pre-approved by the Department of Contracts. All documents received were scrutinised from a legal, administrative and technical perspective. 

When the evaluation process was completed and a recommendation to DOC was made and accepted, I signed a 'letter of intent' to the preferred and only bidder as per tender conditions and with the approval of the DOC. The letter of intent is not a contract in itself. An agreement between two contracting parties is initiated once a contract is signed and not before. This was made amply clear in the tender document which stated that 'only the signed Concession Agreement will constitute an official commitment on the part of the Central Government Authority and the operations of the Concession may not begin until so permitted in terms of the Concession Agreement'. 

This contradicts the impression given that an agreement was finalised before any negotiations had commenced. Each and every step along this tendering process was in close liaison with the Contracts Department and in no instance following the issuance of the letter of intent did the DOC notify me of any irregularity. 

This was the first tender for the purpose of producing renewable energy from various public spaces. There was a very complicated and steep learning process to be followed with the Government Property Division, WSC, MEPA, MRA, etc. Lease and other agreements had to be reached and secured with the contractor prior to having MRRA agreeing to endorse the final and binding award of this contract. With this letter of intent MRRA expressed its willingness to start a clarification process on the preferred bid and always subject to the final contract agreement as per tender document. The letter of intent had to be issued to commit all government entities to follow these clarification, permitting, power purchase and leasing procedures and was a step towards a final contract.  

Following the clarification period with the preferred bidder and the finalisation of negotiations with other government entities, the drafting of the contract was completed. At this point my team and I made a presentation to MRA to approve or otherwise the FIT that we had received through the public call. The Board of MRA approved the FIT following a meeting of the Board on Wednesday 21 st November 2012. No concern about the letter of intent that had been issued by the Ministry was raised by MRA during this meeting. 

Once MRA approved the FIT, MRRA proceeded to enter into a contract with the winning contractor. This was done once clearance from the Ministry of Finance had been secured. 

I am convinced, as I was then, that this tender was in the best interest of Malta to help it meet its 2020 renewables target and at the same time generate some revenue from unused public space. Furthermore, I believe that the above gives a true representation of how the facts unfolded with regards to this tender.