engine-setup fails with 'Cannot connect to Engine database using existing credentials'

Issue

• When trying to execute engine-setup:

# engine-setup 
[ INFO  ] Stage: Initializing
[ INFO  ] Stage: Environment setup
          Configuration files: ['/etc/ovirt-engine-setup.conf.d/10-packaging-dwh.conf', '/etc/ovirt-engine-setup.conf.d/10-packaging.conf', '/etc/ovirt-engine-setup.conf.d/20-packaging-rhevm-reports.conf', '/etc/ovirt-engine-setup.conf.d/20-setup-ovirt-post.conf']
          Log file: /var/log/ovirt-engine/setup/ovirt-engine-setup-20150808044114-spbnwv.log
          Version: otopi-1.3.2 (otopi-1.3.2-1.el6ev)
[ ERROR ] Failed to execute stage 'Environment setup': Cannot connect to Engine database using existing credentials: engine@localhost:5432
[ INFO  ] Stage: Clean up
          Log file is located at /var/log/ovirt-engine/setup/ovirt-engine-setup-20150808044114-spbnwv.log
[ INFO  ] Generating answer file '/var/lib/ovirt-engine/setup/answers/20150808044118-setup.conf'
[ INFO  ] Stage: Pre-termination
[ INFO  ] Stage: Termination
[ ERROR ] Execution of setup failed