Is it good that we are getting a blow-by-blow account of the Public Accounts Committee (PAC) hearings on oil procurement in 2010?

I question it because the process is so convoluted and necessarily long that people will not understand half of what is being said, get bored with it and lose interest. What we need is a knowledgeable summary of the highlights.

On watching the hearings, I could not see either former minister Tonio Fenech PN, who is listed as chairing the committee on the Parliament website’s PAC page, or Minister Konrad Mizzi who is listed as a member.

Is that because the new administration has recognised that ministers should not sit on parliamentary committees and Tonio Fenech was involved as minister of finance in the period being investigated?

It was a farce when the previous PAC had started investigating Enemalta and Tonio Fenech (then minister of finance) and Austin Gatt, another minister whose portfolio included Enemalta, were on the committee.

Watching the proceedings, I saw that it is Jason Azzopardi PN, who is now chairing the PAC. Is he standing in just for this particular case? In any case, the website PAC page needs to be updated. For example, I also noticed Labour MP Luciano Busuttil on the CTTEE; he is not listed on the PAC page. It also should have the party the member is representing.

I watched some of David Spiteri Gingell’s evidence. What was illuminating was that the former Enemalta CEO told the PAC that when he took up the job, he never expected to find so much neglect in the corporation’s soft management infrastructure.

Yet, he also said that there was recognition by Gatt’s ministry of neglect in the corporation’s management, which was why he had been appointed. He directed his criticism towards Tonio Fenech as then finance minister and not Austin Gatt or then Enemalta chairman Alex Tranter, who he said, backed him.

Obviously, not enough since they gave in to Fenech’s conclusion on the matter. Besides, surely if Enemalta was in such neglect all these three had something to answer for?

Spiteri Gingell said he set about trying to reform, but found hurdles and obstructions. He recalled that in 1997 he had written a report on Enemalta’s structures and the changes that were needed, but three years later, nothing had been changed.

Getting to the crux of the matter in hand, he was asked if he had pointed out the shortcomings in the Fuel Procurement Committee. His answer was that the shortcomings were obvious throughout Enemalta, which did not answer the question.

According to the NAO’s report, prior to the formulation of the Corporation’s Fuel Procurement Policy in January 2011, Enemalta’s fuel procurement function was effectively operating in a policy vacuum.

It was impossible for the NAO to effectively audit the decision-making process employed by the committee in adjudicated tender bids received and evaluated prior to May 2011. The implications of such severe limitations in the availability of records documenting the FPC’s decision-making process are brought to the fore in those instances when the Committee awarded tenders to bidders who (based on severely limited information at the NAO’s disposal) did not submit the most favourable offer.

Asked about the decisions leading to the selection of the BWSC plant using heavy fuel oil, Mr Spiteri Gingell said he entered the scene when tenders were about to be issued. At the time Malta was running out of time – with Marsa needing to be closed and a gas infrastructure still to be built. That was maybe something which should have been done earlier, but at the time he proposed a phased approach starting with heavy fuel oil and then gradually converting to gas once the infrastructure existed.

Spiteri Gingell said he had resigned out of a feeling of impotence just 11 months into his job. He blamed his resignation on Tonio Fenech, “One of the most glaring shortcomings of such a major corporation was that it lacked accountants and it was unable to recruit any with the funds allocated by the finance ministry,” he told the PAC. The finance ministry refused to issue funds for recruitment and the necessary change. As a result, a billion euro organisation such as Enemalta lacked even the basic management structures.

The finance ministry simply did not understand the gravity of the situation at Enemalta, Mr Spiteri Gingell, told the PAC. Tonio Fenech immediately released a statement rejecting Spiteri Gingell claims that he had failed to understand the grave situation the corporation was in.

He said that Spiteri Gingell’s proposals would have cost some €5.5 million and the finance ministry viewed that as exaggerated. It would have been irresponsible to allow such expenditure when in 11 months Mr Spiteri Gingell did not accompany his request with a study showing what savings the corporation would have made as a result of this substantial investment.

Actually, it was not so much a matter of saving funds directly, but saving the corporation from corrupt practices due to lack of vigilance, I would have thought. Not to mention saving his government from the ensuing embarrassment and more.

Fenech further claimed that in consultation with Austin Gatt, at the time, he had explained that the finance ministry could not acquiesce to the demands but instead proposed a structure that was half the size.

Fenech then falls into ‘in gossip’ and hearsay claiming that he was told by an Enemalta board member that Spiteri Gingell’s resignation may have been prompted by his anger at a ministerial decision that overruled him in discussions with the General Workers’ Union on a collective agreement. 

Spiteri Gingell claimed there had been political interference, and he stepped down because he had no control over finances and people, even though he was the one who was accountable. He insisted that there was no interference from minister Austin Gatt, who was directly responsible for Enemalta at the time.

But, surely it was Austin Gatt’s job to interfere if his colleague the finance minister was not supporting improvements at Enemalta. After all he (Gatt) was directly responsible that things should improve. He appointed Spiteri Gingell for that very purpose, we were told. So the country suffered because ministers were reluctant to fall out publicly, since loyalty to their party unity comes first.

It was telling to see witnesses’ reactions to the questions relating to the lack of minutes as detailed in the NAO’s report. They acknowledged they were not happy with the situation but accepted the status quo.

When the PAC questioned Engineer Karl Camilleri who served as CEO of Enemalta between 2008 and 2011, his response was that he was told (in 2009) that the practice was that minutes were not taken. He could not recall who told him. He did not like that but at the time he was still gearing himself in the post.

But if his term started in 2008, did it take him a year to realise no minutes were being taken and did it take him so long to gear up? Despite other witnesses claiming that the shortcoming in the procedures of the Fuel Procurement Committee at the time were well known, Camilleri said that there was never any indication of anything irregular being done and therefore he had not gone into how the call for tender was issued.

Meanwhile, on Friday, Enemalta chief financial officer Antoine Galea filed a judicial protest against Karl Camilleri saying he made false allegations against him while testifying at the Public Accounts Committee.

No doubt we shall be regaled with even more revelations and dodging in responses to the PAC’s questions as it continues with its quest to unravel the goings-on of oil procurement. But please just give us the highlights.

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