Making us pay for oil

When did Prime Minister Lawrence Gonzi first learn that Trafigura, when selling oil to Enemalta, was paying commissions to Frank Sammut, the consultant of its chairman sitting on the Enemalta committee while purchasing said oil?

The PN is trying to play down the importance of this Sammut by stating that he was just a 'Consultant to the Chairman' and the Enemalta oil procurement committee.

People sitting on Procurement committees know that when the Chairman appoints someone as consultant, this individual will have absolute power. He is then appointed,  and paid by the entity due to his 'vast expertise' which apparently cannot be matched by anyone sitting on that same committee. Few would dare to question his 'expert advice'. Otherwise, why appoint him in the first place? Unless he is influencing the decision-making process to 'please' the god that appointed him and is paying him. He is not one among equals, but very much first among equals, especially if he is a wheeler dealer.

Why do chairmen of corporations and authorities engage all these consultants and make them sit on committees that buy products and services? They are the experts! They sway the decision process to the way the chairman advices the consultant to advise the committee and to then hide behind his consultant's advice when questioned.

Have the Cabinet - along with prime minister Gonzi - ever been informed, directly or indirectly and prior to last Sunday, that kickbacks seem to have been the order of the day in Enemalta's oil purchasing contracts?

Last Sunday, Gonzi told the police to investigate media reports that Frank Sammut used to receive a commission on the fuel purchased by Enemalta. But the PN leadership knew years ago that something was very rotten at the top tier of Enemalta.

Three years ago, former PN President Dr Frank Portelli said that top Enemalta people who had since left the energy corporation made a lot of personal gain out of public contracts to buy oil for the country. He said he was ready to name these persons when the government enacts the Public Disclosures Act and the Whistleblower's Act, which protects those who reveal information about corruption.

The government, led by prime minister Gonzi, did not enact such laws, and many cases of bribery and corruption remain concealed from public view. What we get to know is only the tip of the iceberg.

On Sunday, Opposition leader Joseph Muscat asked the Prime Minister whether he knew of corruption in the purchase of oil by Enemalta and failed to act. Top Enemalta officials and people very close to the PN leadership were not surprised with the details published by the media on Sunday.

On Sunday, MaltaToday published documents that showed that on 6 February, 2004 Trafigura, the multinational commodities trading company, invoiced Enemalta for the amount of US$4.4 million for 26,000 metric tonnes of low sulphur fuel oil. On 25 March, 2004, Trafigura was invoiced for US$19,402 by a company called 'Energy & Environment Consultants Ltd.' registered at 28, Irish Town, Gibraltar holding an account at the HSBC branch in Piazza Manzoni in Lugano, Switzerland.

Investigations carried out in Gibraltar unearthed evidence that the director of this company was Frank Sammut, the consultant of Chairman Tancred Tabone and appointed to sit on the Fuel Procurement Committee of Enemalta and the General Manager of the Government owned Mediterranean Offshore Bunkering Company Ltd. (MOBC), which also fell under the ministerial responsibility of Austin Gatt.

Last Friday, John Pace, who was responsible for the generation of electricity under the Fenech Adami administrations between 1999 and 2005, wrote in the Times about the changes Austin Gatt introduced at Enemalta when he was made Minister responsible for energy and investments in 2003: 'Gatt immediately made administrative changes in Enemalta, including a change in how fuel was procured. This resulted in the formation of a powerful lobby by the fuel oil importers who would stand to lose millions of euros if the power stations converted to gas'.

Since 1999, successive PN governments have had the option to generate electricity using gas instead of oil but always decided to go on using oil to fire the power stations. For example, at one point Malta had the golden opportunity to have the gas pipeline between Libya and Sicily pass on land through Malta. The pipeline would have cost us nothing and we would have had a constant supply of gas controlled directly by us on its way to Sicily. But this opportunity was lost because somebody very greedy in Malta asked for a very handsome kickback to allow this pipeline to pass through Malta.

Such a pipeline would have saved thousands of families, and businesses millions of euros through lower water and electricity bills.

But those few at the top who are making money on oil imports would have lost their millions in commissions.

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It's not only the pipeline that would have saved households millions of Euros. Documents published just very recently indicate taht the level of commissions could have been operating as high as 10-15%. Who pays that commission? After the corrupter pays it, the price is simply added on to the base price of the oil. So Enemalta (for which read we, the taxpayers) ultimately ends up footing the bill for the act of corruption itself. Which means that our electricity bills could have been around 10-15% cheaper already without any investment in gas. So yes, Dr. Gonzi and Mr. Fenech, it IS POSSIBLE to have cheaper electricity and water bills.
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Where has it been said that we were offered land passage of the Libya-Sicily pipeline? Not likely the Italians would have left us in control of their gas supply. The ENI offer was for a spur from Gela as far as I know, after the notion of an underwater spur was rejected on engineering grounds. That having been said, the Italians are currently building a 1400km line from Algeria to Sardinia, across Sardinia on to Piombino near Elba.