Scandinavian firm Burmeister & Wain (BWSC) have been awarded the €200 million contract for the extension of the Delimara power plant, amid a controversy over alleged irregularities during the adjudicating process.
The Department of Contracts yesterday confirmed that the Scandinavian firm was awarded the contract on 3 April, while Enemalta officials met with the Contracts Committee yesterday to discuss the details relating to the same contract.
Awarding BWSC with this multi-million contract, government has officially discarded natural gas for the generation of electricity and will invest in the use of fuel oil, which in turn will have an added cost through the generation of tonnes of toxic waste every day.
BWSC was short listed in August last year together with five other bidders, including Ido Hutney Projekt / Bateman Energies BV who through a letter sent to Prime Minister Lawrence Gonzi last March, complained about “alleged irregularities” during the adjudicating process.
The issue was last week referred to the Public Accounts Committee that instructed the Auditor General and the permanent secretary within the Ministry of Finance to “verify” the issues raised by Hutney-Bateman.
Replying to questions put forward by this newspaper, Prime Minister Lawrence Gonzi said his office “cannot interfere in the adjudication process of tenders.”
He added that the public procurement regulations in Malta give the right to anyone who feels aggrieved in any way by a procurement, to appeal from a decision of the Department of Contracts.
“Hutney-Bateman could have appealed the decision, however it did not,” he said through an official spokesman.
Minister for infrastructure Austin Gatt criticised Labour leader Joseph Muscat for his stand on the allegations made by Hutney-Bateman, accusing him of “representing” the Israeli owned company, a charge both Muscat and Hutney-Bateman immediately denied.
Austin Gatt pointed out that fuel oil, which was acceptable under EU emission rules, was much cheaper.
“Using gas would raise the cost per unit to €0.16823 while the selected plant would have a cost per unit of €0.12467, and this benefited consumers,” he said.
Speaking during a press conference yesterday, Prime Minister Lawrence Gonzi insisted that “had bid been accepted, (Hutney-Bateman) power tariffs would have had to rise substantially.”
While it is true that Heavy Fuel Oil is cheaper than natural gas, environmentalists argued with Business Today that a plant run on natural gas would have incurred much lower running costs over 15-20 years than the alternatives offered.
Another point of contention raised by Hutney-Bateman was that the emission limits were raised during the adjudicating process, prejudicing its position and allegedly favouring their competitors who were offering a Heavy Fuel Oil plant.
Late last night, a spokesman for the Ministry for Resources and Rural Affairs told this newspaper that the amendments to the emissions law “were introduced to bring local legislation exactly in line with the Large Combustion Plants Directive 2001/80/EC. Our regulations are fully compliant with EU emissions rules.”
The plant chosen by government for Enemalta to operate will be capable of generating a minimum of 100MW of electricity.
The increase in electricity supply to sustain the current rate of development of the economy, especially since Mater Dei Hospital is now operational and other large infrastructural projects like Tigne’, SmartCity, Penderville, Fort Cambridge and others come online, will require an increased generating capacity from the country’s energy resources.
Peak demand registered in 2006 reached 148 per cent of what it had been in 1997.