Australian firm considers liquid gas power station for Malta

An Australian company is considering the feasibility of building a power generating facility in Malta using liquid natural gas, Investments Minister Austin Gatt told Parliament yesterday. He was replying to Opposition questions after making a statement to explain the introduction of the new surcharge on electricity bills.

Reacting to claims about inefficiency at Enemalta and that the Delimara power station could have been better built, Dr Gatt said the fact that efficiency had improved was underlined by the fact that ratings agency Standard and Poor's had improved the corporation's credit rating. As a result, debt servicing costs had been reduced by Lm1.7 million per year.

This improved credit rating would enable Enemalta to finance the replacement of its two oldest power generation turbines.

Enemalta's efficiency was also reflected in the fact that Malta's emissions were well below the international threshold, to the extent that there would this year be a revenue of Lm900,000 as Malta sold the balance to the emissions threshold to countries which exceeded the limit and risked being fined.

Replying to questions by Nationalist MP Mario Galea and Labour MPs Charles Buhagiar, Joe Mizzi and Anglu Farrugia, Dr Gatt said he never interfered in the workings of the Oil Procurement Advisory Committee and he never refused any proposal for an oil hedging agreement, as recently claimed by Labour MP Evarist Bartolo. He was not for or against hedging because that was a technical issue best left to experts. The committee had taken three decisions. In April it considered hedging but opted against, a decision proved correct within two months. In July it decided to try reaching a hedging agreement, but the necessary parameters were not reached and no agreement was concluded. A hedging agreement was however concluded this month.

On the liberalisation of fuel imports and power generation, Dr Gatt said Enemalta did not have a monopoly on power generation. Indeed it was obliged to buy power from anyone who generated it in Malta. Its monopoly on the importation and distribution of fuels would end next January 1.

As had been said before, the core role of Enemalta was power generation and distribution, and its fuel and gas sections would eventually be sold off.

Dr Gatt said the power surcharge would continue to be adjusted so that, in two years' time, it would reach 84 per cent and local power prices would fully reflect the price of oil on the international market. This was the same system adopted when petrol prices were gradually brought in line with international prices some years ago. At current levels, the surcharge would rise by 1.1 per cent every month for 24 months, but this increase would be lower if international oil prices fell.

Nonetheless, Dr Gatt said, even with a surcharge of 84 per cent in two years' time, electricity bills would still be lower than what they would have been under the Labour government, when they would have risen by 96 per cent.

Dr Gatt said he hoped that those calling for more efficiency at Enemalta would not, next year, try to stop efforts to change work practices at the corporation. He hoped they would not complain when measures were introduced to reduce overtime, improve shifts, change the way promotions were made, improve discipline and clamp down on electricity theft.