published on May 1, 2010
Many unanswered questions arise from the National Audit Office (NAO) report entitled Enemalta Corporation Tender for Generating Capacity. The conclusions are certainly damning and with no stretch of the imagination can they be considered as pointing at mere shortcomings.
Was there any corruption involved in the Delimara tender? The NAO report is clear: “The NAO’s inquiry did not come across any hard and conclusive evidence of corruption…” (page 8). In my opinion this means that the evidence of wrongdoing encountered and documented does not lead to a definite conclusion. Evidence is still there awaiting further investigations.
It would be worthwhile to recollect that in the few cases in Malta’s recent history where it was concluded that corruption had been proven this had resulted because someone directly involved had spilt the beans.
As reported in other sections of the press, the commissions in play in connection with the Delimara tender are substantially higher than what is normal in this business. When this is coupled with the lack of cooperation encountered by the NAO during its investigations as well as the selective leakages identified, it is reasonable to conclude that much more could yet be unearthed.
But then there is also a related case of proven corruption: Lahmeyer International (LI), Enemalta’s advisers, were found guilty of corruption relative to two World Bank contracts and, as a result, on November 6, 2006, they were added to the World Bank’s blacklist. The tainted contracts refer to the Lesotho Highlands Water Project in respect of which LI had responsibilities for detailed design work, construction supervision, project studies and technical assistance in connection with water delivery tunnels.
LI offered their services to Enemalta in April 2008, 17 months after being included on the World Bank blacklist. Initially, the unsolicited services of LI were refused by Enemalta but one month later someone had second thoughts and their services were accepted. Why?
When queried by the NAO, senior Enemalta officials declared that they were not aware that LI was blacklisted by the World Bank. The NAO report declares (page 115) that it “was not convinced of the explanations given”.
In the meantime, LI is still advising the Malta Resources Authority, which has not yet publicly reacted to the news that its adviser is currently on the World Bank blacklist for corruption. But maybe we will hear about that at some later stage when the energy interconnection between Malta and Sicily is scrutinised.
In my opinion, the fact that Enemalta did not check into LI’s ethical credentials indicates that Enemalta does not consider these to be of any relevance to its operations. This is not a shortcoming but a serious error of judgment.
Some may point fingers at “inexperienced officers” who dealt with the case. Enemalta board has a duty towards taxpayers to ensure that it engages only the best available staff. It was for this reason that, in the past, we were informed of the substantial emoluments being paid to some of the senior officers. We have been reminded that if you employ the best you cannot pay peanuts. Much more than peanuts has been paid but Enemalta has ended up with monkey business just the same!
There is then the issue of changing the rules mid-way through the process. Enemalta had initiated the tendering process in November 2006 through a Request for Proposals. During the adjudication, in January 2008, the government changed the rules relative to the permissible emissions. The NAO states that while this change is permissible in terms of the relative EU Directive (page 22) the tendering process should have been aborted and the tender reissued in view of the fact that the original specifications were based on different emission levels. Such a line of action, says the NAO, would have ensured a greater degree of transparency and equity (page 53).
There are many other issues the report unearths but the space allotted for this article is very limited.
The NAO-led inquiry was a tough job the Auditor General has done honourably. I have no doubt that he will take the criticism by Enemalta’s chairman and members of the Cabinet in his stride. It is, after all, an occupational hazard that goes with his job.
In view of the damning NAO report, in a democracy, the politician responsible for the Enemalta Delimara tender would stand up, accept political responsibility and resign. So far, he has not done so, which means that all Cabinet has now been forced to collectively shoulder the responsibility instead of their colleague. The only positive note is that he has been relieved of his Enemalta duties some weeks ago!
The NAO report is not the end of the story as many answers are still awaited. This is a business yet unfinished.
original article at : The Times