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Tuesday, April 20, 2010

Procurement controversies -- Malta

No hard evidence of corruption - Auditor
The Auditor General "did not come across any hard and conclusive evidence of corruption" in the inquiry concerning the tender issued by Enemalta Corporation for the supply of a new power generating plant at Delimara.

However, he complained of "the lack of cooperation from certain stakeholders who contended that they could not recall certain events or information" and questioned the undue haste with which the agreement was signed.

The auditor said that "a case in point is Mr J. Mizzi, local representative for the tenderer awarded this contract (BWSC), who was considered one of the key players throughout this inquiry. Although summoned by the National Audit Office on three separate occasions, he repeatedly cited lack of memory when asked certain questions".

In his report, the Auditor General noted that Enemalta chairman Alex Tranter had declared a conflict of interest, especially since, in his private capacity, he had business links with the local company entrusted with civil works in one of the bids under consideration (which eventually was selected and agreement signed with).

"It was noted that the chairman, prior to his declared conflict of interest, had appointed the members on the evaluation and adjudicating committees responsible for the evaluation of tenders."

"Considering the circumstances of this case it is felt that it would have been more prudent and appropriate had the Enemalta chairman resigned from his post at the time when he had declared a conflict of interest. This would surely have eliminated the extensive controversies which arose at a later stage, especially in view of the fact that the local company with whom the chairman had declared having professional connections with was actually sub-contracted the civil works of this tender."

COMMENT: Conflict of interest provisions of the Guam procurement Ethics Rules (modeled on the Amercian Bar Association Model Procurement Code) would have required the minister to recuse himself long before he finally declared his conflict. He should have recused himself from the appointment process in the first instance. 5 GCA § 5268.

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