PAC Electrogas probe queries inept due diligence of bidders but gets few replies

A former Enemalta official could not recall whether the board he headed had questioned due diligence findings on bidders for the gas power station tender nine years ago.

Louis Giordimaina, who as CEO headed the project review board in 2013, told parliament’s Public Accounts Committee on Tuesday that he was not involved in the due diligence process.

“I based my judgement on the due diligence of bidders carried out by the experts in various evaluation committees,” he said when asked about the conclusions of the National Audit Office that the financial due diligence of bidders did not take into consideration anti-money laundering aspects.

Opposition MP David Agius asked Giordimaina how nobody from the review board asked about due diligence process. “Did you not ask? Or you asked and were ignored and the process continued just the same?”

“No, nothing of the sort happened,” Giordimaina replied before Labour MP Andy Ellul objected to Agius’s style of questioning, accusing him of making an assertion.

Agius rephrased his question: “So, nobody challenged these documents presented to you?”

Giordimaina insisted he could not recall the details. “They [the evaluation committees] used to give us presentations. This happened a long time ago now. We used to seek clarifications and they used to come back to us with replies but I cannot recall the details.”

The PAC is probing the findings of an NAO audit on the multi-million-euro tender awarded to Electrogas in 2013 for the construction and operation of a gas power station and liquefied natural gas terminal at Delimara. The NAO report concluded in 2018 had raised several concerns over the tendering process, especially how certain conditions were changed halfway through the tendering process.

Giordimaina insisted that some aspects of the tender had to change as a result of queries made by the bidders, insisting that every change was communicated to all competitors.

The project, a key plank of the Labour Party’s 2013 electoral manifesto, delivered cheaper electricity rates and shifted the production of electricity from heavy fuel oil to the cleaner natural gas. But the project was also mired in controversy.

The tender was awarded to Electrogas, a consortium made up of Maltese interests, Siemens, Azerbaijani company Socar and Gasol, amid claims of corruption. Eventually Gasol pulled out of the arrangement because of financial difficulties.

One of the shareholders of Electrogas – Yorgen Fenech – was charged in 2019 with masterminding the assassination of Daphne Caruana Galizia.

Additionally, Fenech also owned a secretive Dubai company, 17 Black, which was listed as a client of two Panama-based companies owned by then energy minister Konrad Mizzi and former office of the prime minister chief of staff Keith Schembri. 17 Black had to disburse €2 million yearly to the two Panama companies according to documents leaked from Nexia BT, the financial services firm owned by Brian Tonna, which set up the Panama companies.

Giordimaina was testifying in front of the PAC about his role and that of the review board he headed in the tendering project. Giordimaina said it was he who gave the Enemalta board the final presentation on which a vote was taken to award the tender to Electrogas.

He acknowledged that his presentation was based on another presentation given to him by David Galea, the man handpicked by Mizzi to oversee the tendering process.

He was also queried by Opposition members on the wide discrepancy in some of the marks awarded to Electrogas and its rival bidder Endeavour but although Giordimaina recalled that the evaluation committee sought answers, he could not remember what the replies were.

Giordimaina explained that Konrad Mizzi used to sometimes attend meetings of the evaluation committee as an observer. But he could not explain how minutes presented to the PAC by Enemalta showed that in one particular meeting in April 2013, Mizzi was an active participant, giving members feedback on the timeline of negotiations, the capacity of the new plant and pricing.

“Konrad Mizzi used to attend some meetings as an observer. He did give us a brief shortly after the review board was set up but in other meetings I don’t recall him participating,” Giordimaina said.

The PAC is chaired by Darren Carabott, a PN MP, and includes David Agius and Graham Bencini as Opposition members, and Andy Ellul, Glen Bedingfield, Alex Muscat and Clayton Bartolo as government members.