MEPA board member declares shareholding in Electrogas Limited
Paul Apap Bologna precluded from participating in MEPA decisions
Paul Apap Bologna, one of the 10 board members appointed to MEPA by the new Labour administration in April, has declared a conflict of interest and will not participate in board meetings discussing the various permits required for the new gas-fired power station.
Apap Bologna is a director of GEM Holdings, which forms part of the Electrogas consortium, which was chosen by the government to build a new power station and offshore gas terminal to provide gas to Malta for the next 18 years.
GEM Holdings brings together the Gasan Group, Tumas Group and CP Holdings Limited, of which Apap Bologna is a shareholder.
The other member of the consortium is SOCAR, a company owned by the government of Azerbaijan, London-based company Gasol and German multinational Siemens.
Apap Bologna was described as a "director of an import company" when the new MEPA board was announced by the new government in April.
A MEPA spokesperson confirmed that on 15 May 2013, board member Paul Apap Bologna officially notified MEPA Chairman Vince Cassar that one of the companies of which he is a shareholder formed part of the consortium tendering for the construction and operation of the new power station.
"He requested that should the consortium's application be shortlisted and have to appear in front of the MEPA board, there will be an obvious conflict of interest."
In view of this, he asked to be excused from any sittings related to this project.
The MEPA spokesperson added that to date the board had not held any discussions or taken any decisions "in relation to the infrastructure of the new power station".
Moreover, two MEPA board members - biologist and marine pollution expert Prof. Victor Axiak and underwater archaeology expert Timothy Gambin - will be precluded from participating in board decisions on the issue, due to their roles as consultants in the EIA for the new plant.
It is normal practice that board members do not participate in decisions over projects in which they are involved as expert consultants.
But in this case, the MEPA board will find itself deprived of the expertise of its two most knowledgeable experts on the Delimara gas plant and terminal's impact on the marine environment.
This particular issue was expected to be one of the most controversial of the new power plant, due to the dredging works required to construct a jetty and the potential of storing gas on a ship berthed to the jetty.
With three members declaring a conflict of interest, only seven appointed board members - mostly government employees - will be participating in the decision-making process. Apart from these seven appointed members, the board also includes two MPs, the chairman and the two deputy chairpersons.
Electrogas will enter into various agreements with Enemalta including an acquisition agreement under which Electrogas will acquire a special purpose vehicle with all the necessary permits to undertake the Project for a consideration of €30 million in cash. The total cost to Electrogas of developing the project over the next 24 months is expected to be around €370 million, which it is envisaged will be financed 80:20 in debt and equity respectively by Electrogas.