The Malta Independent 15 April 2021, Thursday

BWSC Power station contract: No evidence of corruption – Auditor General

Malta Independent Thursday, 18 November 2010, 00:00 Last update: about 8 years ago

Even before the Public Accounts Committee convened in the hall dominated by paintings of 18th Century popes, it was clear this was intended to be a defining moment. Where in other times, when PAC was discussing the Auditor’s report on the Fairmount contract at the drydocks Tony Zarb and Sammy Meilaq were among the audience, so too on Tuesday evening persons in the Prime Minister’s secretariat trooped in, together with Communications Officer Gordon Pisani, a sure sign that after so many polemics, this was meant to be, from the government’s point of view, a defining meeting of the PAC, time to kill and bury the corruption spin made all through summer by the Opposition.

An even surer sign about what was brewing came when Lou Bondi walked in – he had never been at any PAC sittings before. And many government MPs put in an appearance but no one, as far as I could tell, from the Opposition.

At the end of the two hours of Tuesday’s PAC, however, it did turn out to be a little different from the scenario prepared by the government, although the government side did succeed to put across its points well. However, it did not manage to shake off what Auditor General Tony Mifsud called the series of extraordinary coincidences that meant the possible existence of something strange about the BWSC contract. Nevertheless, Mr Mifsud again confirmed, there was no hard evidence of corruption found by the National Audit Office in its 11-month investigation.

At the meeting, Evarist Bartolo took his place as a full (i.e. not substitute) member, replacing Dr Alfred Sant. Mr Bartolo, of course, was the one whose journalistic investigations of the BWSC contract had raised the issue to a scandal. So his presence on the PAC along with that of Minister Austin Gatt was explosive.

It was. Time and again the PAC meeting became a row of shouted invective. At one point, Dr Gatt threatened that if Mr Bartolo was to use again the word ‘liar’ in his regards, he would abandon the meeting along with the rest of the government delegation.

Mr Bartolo had begun the skirmishes by denouncing, right at the beginning, that what with the Speaker’s ruling and the government majority in PAC blocking the calling of witnesses for the PAC meeting, PAC had been well and truly ‘castrated’.

To which fellow member Helena Dalli had rejoined by claiming that in that case, she was the only non-castrated member on the PAC. But it was Ms Dalli herself who later was to provoke the biggest explosion at the meeting when she remarked at a rather sticky point about ‘Terinu’ (the man who falsely bore witness against Lord Strickland in the 1930s). Dr Gatt, hugely incensed, told PAC chairman Charles Mangion to order Ms Dalli to withdraw that remark. Dr Mangion, struggling hard to keep the meeting orderly, mildly remonstrated with Ms Dalli and the meeting continued.

Right at the beginning of the meeting, Dr Mangion began asking about the tender procedure followed. Mr Ambrogio from NAO explained that Enemalta wanted at first to follow one type of tender procedure, that of a negotiated procedure, and wanted the Contracts Department’s clearance which never came. Enemalta went ahead, but when the Contracts Department got a new director, Enemalta was persuaded to change the procedure to that which entails three packages.

This orderly beginning was soon interrupted, first by Dr Gatt who wanted to question the Auditor and then by Mr Bartolo who questioned why should Dr Gatt be the first to ask questions.

Dr Mangion told Dr Gatt to go ahead and ask. Dr Gatt began by a full paean of praise for the Auditor and his team. Then he point-blank asked the Auditor, Tony Mifsud, if he had find any evidence of corruption.

Mr Mifsud replied he did not find any hard evidence of corruption, and, in reply to a further question by Dr Gatt, agreed that had he found any, he would have gone to the police. Nor did he find any evidence of improper influence and even in such a case he would have gone to the police. However, Mr Mifsud remarked that some people interviewed by NAO gave evasive replies or said they did not remember.

Dr Gatt here launched into what was clearly the main point he wanted to drive at. If someone was out to corrupt the process, than that needed people to be corrupted. He got Mr Mifsud to list the 10 phases of the entire tender process, identify the players at each phase, 25 players in all, agree that in each of these 10 phases there was always unanimous approval. In reply to further questioning by Dr Gatt, Mr Mifsud replied there was no evidence of corruption at each of the 10 stages.

To amplify: David Spiteri Gingell and Peter Grima were the ones who decided that the financial package was to get 75% of the points and the technical side 25%. Then there was the shortlisting phase and six people in this stage accepted BWSC to be shortlisted. This was later confirmed by Enemalta’s adjudicating committee, composed of five people including David Spiteri Gingell and Mr Grima. Then the report was sent to the Contracts Committee, a further 10 persons. The next three phases were technical and Bateman was chosen. This was followed by the financial evaluation, which was when BWSC was given more points.

Three reports were drawn up, there was no appeal from the final adjudication, except for a complaint by Bateman they did not know of the final adjudication.

It was now the Opposition’s turn to question Mr Mifsud. Ms Dalli asked him to explain what he meant by his remark about ‘smoke’. There’s no smoke without fire.

Mr Mifsud replied by speaking of a series of coincidences. NAO sent for Joseph Mizzi (BWSC’s agent) three times and he was evasive, not remembering things, not cooperating. This makes you think, Mr Mifsud said.

Besides, he amplified, Lahmeyer International had offered Enemalta to be its consultant and Enemalta declined. But a short time later, Enemalta appointed Lahmeyer as its consultant.

Ms Dalli wanted to know more but Prof. Ian Refalo, counsel to NAO, objected since to reveal what people said to NAO questions would be in breach of the professional secrecy with which people accepted to be interviewed.

Ms Dalli remarked all this shows that PAC should have been allowed to question witnesses itself. Reference was then made to an email from Mr Mizzi published by Mr Bartolo. Dr Gatt pointed out that Mr Mizzi had said that email was not written by him directly.

This provoked the first big outburst of the hearing with Mr Bartolo claiming that Dr Gatt was protecting Mr Mizzi. ‘You should be here in front of us, being questioned by us,’ he told Dr Gatt, ‘rather than sitting on PAC with us’.

Resuming, Mr Bartolo said he agreed that evidence testified by people to NAO should not be revealed for this would scare off people from opening up to NAO.

A discussion ensued about the absent Mr Mizzi. On the one hand, an NAO official said that Mr Mizzi passed on to BWSC the change in legislation but he (Mr Mizzi) seemed he did not realise the importance of this change, thus suggesting he was not a technical person. He was bluffing.

Mr Bartolo disagreed. He pointed out that Mr Mizzi had foreshadowed Enemalta’s change of specs from a 36 MW plant to a 100MW plant. That was no bluff. To change those specs needed a change in the law. He was also accompanied by a lawyer who used to be Enemalta’s lawyer.

Mr Mifsud replied that his report did state that in NAO’s opinion, the tender procedure should have been blocked and re-issued again.

Dr Gatt pointed out the email retrieved and published by Mr Bartolo, what was claimed to be the ‘smoking gun’ was dated 10 May 2005, a full 18 months before the Request for Expressions of Interest was published. And the tender was awarded in April 2009, a full four years after the email.

Dr Gatt added that the report states that the Labour Party told the NAO that Mr Mizzi was in contact with an engineer at Enemalta. This engineer was questioned but he denied. PL also claimed Mr Mizzi was in close contact with a person at the Contracts Department. This was investigated by NAO but nothing concrete was found. PL also claimed that Mr Mizzi was in touch with ‘political levels’. Was there any evidence found by NAO of any interface between Mr Mizzi and a government politician, or by BWSC?

After a moment’s silence by the NAO officials, Charles Deguara, Deputy Attorney General, said no such evidence was found.

Dr Gatt then asked who was Joe Mizzi. He was employed as a chief draughtsman at Enemalta but left in 1991 or 1992. But the NAO report does not speak of the agents of the other two tenderers, MANN and Bateman. Did NAO speak to them?

Mr Mifsud said that the Bateman man asked to meet the NAO team together with his legal adviser.

Dr Gatt insisted: who represented MANN and Bateman? To which Mr Mifsud said MANN was represented by Gasan and Bateman by Fenech.

Dr Gatt then referred to Associated Supplies Ltd with Joseph Rizzo as its head, with which Mr Mizzi was employed after leaving Enemalta. Mr Mifsud confirmed that for 20 years ASL had won the bulk of Enemalta’s tenders.

NAO had called in both Mr Mizzi and Mr Rizzo for a confrontation but Mr Rizzo had claimed Mr Mizzi was ‘bluffing’. Relations between the two were deteriorating.

But in 2005, Dr Gatt pointed out, the aim of the two was to get the tender to BWSC and ASL. Then Mr Mizzi left ASL but BWSC were still represented by him.

Dr Gatt resumed: PL had claimed that Mr Mizzi was in contact with ‘political levels’. Who was this?

Mr Mifsud said he did not distinguish but he understood PL’s reference to be to high up in the political hierarchy.

Dr Gatt reminded everyone he had gone of his own initiative to NAO and testified that he neither met Mr Mizzi nor BWSC. He was ready to get an affidavit from the Prime Minister, all members of Cabinet and all government MPs to state the same.

In reply to further questions by Dr Gatt, the NAO team replied that PL had not indicated who in government was Mr Mizzi’s contact.

Mr Bartolo pointed out that the emails he had produced were from Mr Mizzi and were dated between February and November 2005. These emails had been deleted by Mr Mizzi when he left ASL but were later retrieved from the hard disk. In reply to further questions, the NAO team said they did not find any subsequent emails, nor did Mr Mizzi offer them any emails, nor could they examine his computer since he is not a government employee.

So you were deprived of four years of emails, Mr Bartolo commented. Yet BWSC were very happy with him and kept him even when he left ASL. He was always very confident he could get things to go his way because he was in contact with the government machine. He kept a two-way communication system working between Enemalta and BWSC. That was no bluffer. A change in policy took place: government had declared it was to go for a gas plant: that was a Cabinet decision, but it was changed to a heavy fuel oil plant, which suited BWSC. Mr Mizzi was in and out of Enemalta and more in and out at the Contracts Division. The visits to Enemalta are not all on record for many files have gone missing while he had many more tenders at the Contracts Division.

Mr Bartolo lastly asked who had been helpful during the NAO inquiry and who had not been. The NAO team replied after some questions that one person from Enemalta and one from the Contracts Division had not been very helpful, while they said that people at Mepa had been very helpful. Mr Bartolo also asked about people from MRA but the NAO team did not reply in this regard.

PAC will continue its hearing on 30 November.

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