Delimara power station procurement ‘violated no rules’, PM seeks apology

Prime Minister Joseph Muscat has today called on PN leader Simon Busuttil to apologise to the country after the European Commission turned down the Opposition’s complaint on the procurement process applied to the new Delimara power station.

Muscat’s comments were made after a report by the European Commission declared that the procurement process and the departure of Gasol from the consortium entrusted with the construction of the power station had not violated procurement rules, and in addition, “no elements indicating a circumvention of EU procedural procurement obligations” were found.

In July, the Opposition claimed that the changes to the Electrogas consortium brought about by the departure of Gasol – the previous lead partner in the consortium – had breached EU procurement rules. Following the departure of Gasol, the West African energy firm which held a 30% stake in the consortium before pulling out of the Labour government’s flagship LNG project due to financial difficulties, the consortium’s remaining members – Siemens Financial Services, Socar Trading SA and GEM Holdings Limited – became equal shareholders.

However, the change in the composition of the consortium fell foul of the Opposition and in July, it claimed that according to the terms of general procurement rules, all partners are bound to remain in the consortium until the conclusion of the contracting procedure and that the “consortium / joint venture winning the contract must include the same partners for the whole performance period of the contract other than as may be permitted or required by law.”

Additionally, the Opposition had argued that departure of Gasol, as a lead partner of the project, should not have been considered and approved except in exceptional circumstances.

However, the Opposition’s complaint was turned down by the European Commission, and this week Elżbieta Bienkowska, the European Commissioner for Internal Market, Industry, held that no elements had indicted that the Maltese government bypassed the EU procedural procurement obligations.

Welcoming the European Commission’s report, Prime Minister Joseph Muscat said that following the report, Simon Busuttil should apologise to the public after it had been proven that the government proceeded according to EU rules.

In July, the Nationalist Party called on the government to explain why Gasol’s financial troubles went unnoticed during the bidding process. The Opposition had also accused the government of cutting corners in the procurement process and in the development application process to meet the “unrealistic” deadline.

The government had previously brushed off concerns that Gasol’s financial problems could impact the power station’s construction, insisting that it would be ready on time in July 2016.

The project was originally scheduled for completion by March 2015, before the government delayed the deadline to July 2016. The government explained that this delay was due to the reopening of negotiations with Electrogas following Shanghai Electric Power’s acquisition of a 33% stake in Enemalta in March 2014.