Infrastructure Minister Austin Gatt reiterated today that the Contracts Committee had awarded a Scandinavian company a contract for a major extension of the Delimara power station because it was the most advantageous.

"Whoever wanted the contract to be awarded to the Israeli bidder wanted the power tariffs to increase," the minister told a press conference.

The controversy erupted after the losing bidder, Israeli company Bateman, wrote to the House Public Accounts Committee claiming its offer was cheaper and better. Opposition leader Joseph Muscat published the letter on Monday.

Dr Gatt said the Bateman offer had a price tag of €148.74 million for equipment, while the winning bidder, BWSC had offered its equipment for €164.9 million. But when the five years maintenance costs were included, the latter's bid turned out to be cheaper by just over €2 million.

Furthermore, when all was considered, the cost per unit was 2c cheaper using the BWSC equipment than Bateman's and there would be considerable savings by using the former's equipment.

The minister also insisted that the new plant, which will be commissioned in 2011 and use heavy fuel oil, would be well within EU environmental standards, as confirmed by German technical experts.

He denied that the Delimara power station chimney would have to be raised by 30m but said another two chimneys of similar height would be built.

He said that dust particles of the type currently emitted into the air would be collectied by the new generation plant and stored until shipped to Italy for recycling.