Contrary to the impression given by Opposition Leader Joseph Muscat, neither the government nor Enemalta Corporation had discarded the Sargas floating power station project.

The government had always wanted to use gas for the power station

Introducing the debate on the financial estimates of Enemalta, Finance Minister Tonio Fenech said the corporation was still analysing the Sargas proposal, but it was doubtful why Malta should go for a €900 million project for unclean energy.

This investment was more than the sum total of the funds invested in the Delimara extension and the interconnector and Enemalta’s debt.

Mr Fenech also pointed out that the government could not carry out a joint study with a proposer.

The Sargas proposal was about conventional and not renewable energy, with one aim being to create carbon dioxide sludge, capture it and sell it for use in Danish oilfields. In that case, it could not be excluded that Malta itself could capture CO2 emissions from the Delimara power station and sell it off too.

Furthermore, Sargas was trying to greatly enlarge a much smaller system in colder Scandinavia which might prove to have different efficiency in different climates. And what about the environmental and visual impact of a very large barge in Marsaxlokk Bay and the ravages of the weather? However, the government would not ditch any potential real solution.

Current energy prices covered investment in production, distribution and the upcoming interconnector. Without return on capital employed, Enemalta would fall back and endanger jobs. If the corporation reduced its return on investment it risked downgrading and incurring higher costs in paying for supplies – and 70 per cent of its annual outlay was for oil purchases.

Out of a total investment of €350 million for energy, the opposition’s promise of a cutback of just €12 million did not mean much. And Labour would have to find ways of recouping it later as advised by MEP Edward Scicluna.

Mr Fenech said the government had always wanted to use gas for the power station, but the huge investments involved would have meant higher costs. The EU’s decision for all member states to be linked to the EU grid, and allocation of funds to Malta for the financing of a pipeline, had changed the scenario of financial viability.

In the meantime, if the government had not moved on with the Delimara extension it would not have been able to guarantee energy for the country up to 2015, when it would need to generate 420 mW compared with the 230 mW up to 1999.

The four oldest Marsa boilers which would be closed when the Delimara extension came on stream were working at 26 per cent efficiency, as against the industry norm of 46 per cent. The minister said that by 2013 annual emissions of sulphur dioxide would be down from 8,000 to 5,000 tonnes; nitrates from 5,000 to 2,600 tonnes; and carbon dioxide from 1.8 million tonnes to 1.6 million. Once the interconnector was up and going the figures would respectively come down further to 2,600, 1,400 and 1.1 million tonnes.

Nitrous oxides from the original Delimara power station had been reduced by 30 per cent.

With the interconnector Malta would have the opportunity to buy 571 to 670 mW for real stability and security, with even cheaper electricity than buying oil. Enemalta would have technical support from the Terna system in Sicily.

Enemalta’s investments in distribution had seen total average power cuts dwindle from more than two hours to 50 minutes.

Mr Fenech put five questions to Opposition Leader Joseph Muscat:

What impact would changing Delimara over to diesel have on the consumer through higher bills?

If he tampered with Enemalta’s return on capital employed, which of its projects would he stop investment on?

What studies had he commissioned before jumping on the Sargas bandwagon?

Was he scientifically convinced of the desired control of emissions and waste disposal of the Sargas system, which was neither tried nor tested?

What would happen to the Enemalta workforce if the Sargas project went ahead?

The questions were answered by Labour MP Marlene Pullicino.

Winding-up the debate, Mr Fenech said he doubted whether Dr Pullicino understood the questions. Instead, he said, she went into a panicked frenzy and did not answer anything. Mr Fenech said one had to keep operating the power station by low sulphur fuel oil not to increase utility tariffs.

Although Dr Muscat had claimed that a Labour government would reduce utility tariffs by operating the Delimara power station on diesel, tariffs would have to be increased by 10 per cent in the coming year if one took into consideration current fuel prices and consumption levels. Electricity consumption had increased by 2.3 per cent this year and it was estimated to increase by three per cent in 2012.

What studies did Joseph Muscat commission before jumping on the Sargas bandwagon?

Mr Fenech said that Dr Muscat’s plans on the return on capital employed would lead to a four per cent decrease on utility tariffs, the overall effect would be a net increase of six per cent. On environmental issues, the minister said that the source of emission was not the Delimara power station but the Marsa plant. The Delimara power station was being built according to EU standards and the contractor was duty-bound to observe them.

Turning to the purchase of oil for the power station, Mr Fenech said that when he took over responsibility for Enemalta he immediately reviewed the system and set up a committee that had established procedures so that this would not be bought by any one person. He revealed that the Auditor General was verifying the system and he had no doubt that the auditor would confirm that the method being used was in the best interests of the country.

The Finance Minister said that Malta’s request for EU funds for the investment in the interconnector cable was before the Council of Ministers because negotiations on the next EU budget had started. Malta was still not an EU member when the current seven-year budget had been negotiated.

Minister Fenech challenged Labour MPs Joe Mizzi and Leo Brincat to go to the Police Commissioner about allegations of corruption.

He said that the price of fuel in Malta was lower than the EU average. One litre of petrol in Malta cost €1.41 while the EU average stood at €1.48. During the last 12 months, the increase in the price of fuel in Malta was also less than that established internationally.

Concluding, Minister Fenech said the opposition’s only promise to the people was that it would divulge its plans how to reduce utility tariffs nearer election time, showing once again that it was inconsistent and had not changed over the years.