BWSC 'middle man' Joe Mizzi summoned before Public Accounts Committee

Maltese middleman Joe Mizzi – the man whose email gave rise to serious allegations of misconduct in the awarding of a €200 million contract to Scandinavian firm BWSC for the Delimara power station extension – has been summoned to appear before Parlaiment’s Permanent Committee on Public Accounts.

The Public Accounts Committee (PAC) will meet tonight under the Chairmanship of PL MP Charles mangion, after Speaker Michael Frendo gave the green light on Wednesday after a point of order raised by Deputy Prime Minister Tonio Borg.

Borg had raised the question on whether the PAC should discuss the BWSC contract when Parliament had already debated it in plenary.

The question was also raised following a walk-out by government MPs from a PAC meeting last Monday that objected to the Committee discussing the BWSC contract.

Chairman Charles Mangion has insisted that his committee discuss and question the people involved in the controversy, in the wake of the Auditor General’s report on the BWSC contract.

As BWSC’s representative in Malta, Joe Mizzi reportedly pocketed €4 million in commissions for having clinched the multi-million deal for the Danish firm. A former Enemalta employee, he was referred to as “intelligence working in fifth gear” by a satisfied BWSC official... and as an “empty chair” by Joseph Muscat.

Mizzi earned himself a reputation and became a household name these last months,  as BWSC’ chief executive Soren Berkholt distanced himself from his own firm’s agent, insisting that Mizzi is “his own man”.

Effectively, this makes of Mizzi the only link capable of explaining exactly what was meant with the tell-tale suggestion of ‘tapping sources’ within Maltese politics... or for that matter, who might explain how BWSC was interested in the tender to begin, when the original technical specifications were such that rendered BWSC’s technology ineligible to apply.

E-mail conversations between Joseph Mizzi and BWSC officials – and copied to sales and marketing director Martin Kok Jensen, who was also present for Monday’s meeting – speak of the need to “tap into higher political sources” in order to secure the contract. 
Mizzi, a former employee of Enemalta Corporation, was not asked for a CV by BWSC, but nonetheless was considered by the company as “the right man for the job.”

According to Berkholt and Kok Jensen, BWSC “need a representative in Malta on a day-to-day basis and it is good to have someone with a technical mind and sound local knowledge.”

But neither Berkholt nor Kok Jensen responded when asked why they had presented their “prototype” bid when they knew that only a change in the emissions law would make their diesel plant eligible to work in Malta.

The award of the tender to Danish firm BWSC, has attracted controversy also because the new turbine will be powered by a diesel engine, to be converted in future to a combined cycle gas turbine. 

A rival bidder, Israeli firm Bateman, claims its combined cycle gas turbine was cheaper than the BWSC offer. Bateman however never formally appealed the Department of Contracts’ decision to award the contract to BWSC, and instead filed a judicial protest in court.

In the meantime, an election dossier compiled by the Enemalta management on 6 March 2008 gave strong hints as to the corporation’s apparent bias in favour of a gas turbine. Why the Corporation’s technical evaluation board then opted for a diesel engine turbine is a moot point. 

Enemalta has presented its reasons for opting for diesel, maintaining this was the most economically advantageous offer in the long term.

However, the Opposition contends that Enemalta effectively asked the government to relax emission limits, and amend the relevant legal notice, thereby allowing BWSC to safely tender for the Delimara extension with its diesel engine technology.

Spiteri Gingell

Another man who is expected to be summoned before the PAC is former Enemalta Chief Executive David Spiteri Gingell, who had publically admitted to have been the person to make a “mistake” and engage blacklisted consultancy firm Lahmeyer International to assist the corporation in the adjudicating process of the tender.

Spiteri Gingell has since resigned his post and found immediate employment as consultant with Vassallo Builder’s Group, that has been entrusted by BWSC to develop the project.

The EU Commission’s anger

EU Commisioner Michel Barnier has taken the issue on the BWSC contract for the Delimara power station extension seriously.

In a letter sent from Brussels, which has never been published by the government, the EC raises serious doubts on legal changes in emissions rules, which it says was carried out to benefit Danish firm BWSC’s bid for a diesel-powered engine that had been previously ruled out by emission laws.

“The change… occurred at a very late stage, just a few days before the expiry of deadline for the receipt of the final bids so that the deadline for the submission of the final offers was extended by four weeks.

“The change was not necessary to comply with European legislation as the Maltese authorities seemed to indicate [but] to benefit one of the exceptions to the applicability of the Large Combustion Plant Directive,” the Commission said.

It added that the new emission limits only applied to diesel engines and not to gas power plants, meaning this disadvantaged a bid by Israeli firm Bateman, which was proposing a cheaper, gas technology.

“This constituted a clear advantage for the bidders that had presented an offer for a diesel powered plant, as the possibility for a plant to produce a higher level of emissions ahs a clear impact on the costs of such plant.”

The Commission said this was in breach of Article 10 of Directive 2004/17/EC that provides equal and non-discriminatory treatment of economic operators.

It added that in posting its award decision online, the Contracts Department had infringed Article 49 of the same directive, which gives operators the right to be informed in writing, and also informed of their right to appeal the decision.