The former chairperson of Enemalta’s board of directors, Charles Mangion, told the Public Accounts Committee (PAC) that the board was following recommendations made by the evaluation committee tasked with deciding on the power station tender that was awarded to the Electrogas consortium.
Mangion, who served as a Labour MP for seven legislatures and is a notary by profession, chaired the board of Enemalta from 2013 to 2014. The PAC is holding hearings about a report compiled by the National Audit Office (NAO) which had highlighted “various shortcomings” related to the deal.
At the time, the board of directors chaired by Mangion was tasked with what he described as a “ratification” of a policy decision that had already been made by the evaluation committee, which in turn was set up to assess all the bids that had been made for the highly lucrative tender.
Mangion also insisted that he had intentionally distanced himself from the evaluation process as he had declared a conflict of interest due to his private business relationship with Tumas Group. Mangion had also previously stated this when facing questions from journalists last year.
When PN MPs sitting on the PAC began asking specific questions about the issues that were later highlighted by the NAO, such as the way in which additional clauses were added to the tender after the selection process began, Mangion reiterated that the board of directors had not examined the merits of the bid itself.
In fact, the board of directors was not even fully present when it had “ratified” the decision already taken by the evaluation committee, which in its own right was constituted of people handpicked by disgraced former energy minister Konrad MIzzi.
Just five out of seven Enemalta board members were present when the decision to endorse the evaluation committee’s recommendation was taken. When Mangion was asked whether he thought he should have recused himself from the decision-making process due to his previously declared conflict of interest, he insisted that the process was already concluded.
The only board member who had objected to the Electrogas bid, Lara Boffa, had stated that a lack of information about the offer placed by the consortium was one of the factors that led to her decision.
Moreover, when Mangion was asked to explain why the board had not discussed the irregular way in which additional conditions were added to the tender after some bidders were already disqualified, he said that the CEO of Enemalta had not raised any red flags about it, and stated repeatedly that he had full faith in the CEO at the time.
The CEO of Enemalta, Louis Giordimaina, had given the board a presentation about the Electrogas bid following the conclusion of the selection process.
The Opposition MPs on the PAC also asked Mangion about the fact that one of the conditions added to the tender during the second phase of the process was a take-or-pay obligation linked with the security of supply agreement that shifted more risk onto Enemalta.
The witness stated that, while Giordimaina would be better able to answer questions about the selection process and the bid itself, none of the risk flagged in the NAO report was brought to the board’s attention by the CEO.
Both Giordimaina and Boffa were mentioned as upcoming witnesses when the PAC reconvenes to discuss the report on the Electrogas deal.
At the beginning of Tuesday’s hearing, the chair of the PAC stated that Giordimaina is currently abroad and temporarily unavailable, while Boffa had informed the PAC that her lawyer was unavailable for the session and would have to reconvene in another hearing.
What sort of board of directors take a decision, based on a so called expert without going into great detail on a project that was supposedly instrumental to turn Enemalta’s financial situation and more importantly an important need for the Country.
I am certain that board members in the private sector, vet such a decision deeply, before voting, one way or another.
This tender should never had been in Enemalta’s remit since Enemalta’s role is to distribute electricity and not to generate it! The generation of electricity is an open market regulated by the Energy Authority, which is not Enemalta.
Moreover Enemalta does not negotiate electricity prices but is subjective to what the Energy Authority decides.
As a former Chairman of Enemalta, I can say that Charles Mangion, said a load of shit.
As Chairman, he is the person who had the responsibility, to study the agreement in all its details, and walk his board members through the significance of the agreement for Enemalta, the Maltese economy, and the responsibility and liability they personally and collectively had in APPROVING the agreement.
In this particular case, Charles Mangion, being a notary, had also the responsibility to give comfort to his directors, that the agreement presented, was legally correct in all respects, without any loopholes for Enemalta.
As regards the CEO, his duty is to implement the policies/decisions established by he Board, and not to take any decision for the board, but only to direct them regarding any reservations they may express and to clarify any misunderstandings, to help them in making an informed decision.
I am also very surprised that the evaluation committee, as a whole, seem not to have met the full board, to explain the contract being placed before them, answer open questions, and give them the specific reasons why they believe that the agreement should be approved by the board.