PN: Labour has Alice in Wonderland proposal
‘Even if they ignore the rules, it’s impossible’
All existent data and technical expertise show Labour’s plan to reduce water and energy tariffs will drive Malta to the wall, just like what had happened on VAT in 1996, according to the Nationalist Party.
In a two-hour presentation, Finance Minister Tonio Fenech yesterday tore into Labour’s proposal, accusing the party of amateurism.
“This is just an Alice in Wonderland proposal,” he said.
“Contrary to what Labour is saying, the plan will cost some €300 million more and will mean more taxes and higher utility bills,” he insisted.
Mr Fenech gave details to back up his argument that Labour’s plan was based on incorrect time frames, costs and techni-cal considerations.
He said the proposal proved the Government’s choice to build a gas pipeline would provide cheaper energy for Maltese consumers. On time frames, Mr Fenech said experts were already claiming it was impossible to have a new 200MW power station in place within just two years.
Labour says a power station it is proposing will be in place two years from being elected. But, according to the minister, even if construction work starts the day after Labour came to power, which would not be the case, the project would still not be completed on time.
A project this size normally has various stages, including feasibility studies, an international call for expressions of interest followed by a proper call for tenders, evaluation and negotiations and a final decision on the bidder.
If no appeal is lodged – a highly improbable scenario judging by past experience – the process will pass on to the planning stage, including the commissioning of detailed environmental impact assessments and issuing of development and environmental permits.
Mr Fenech said the power station extension took six years to complete while the interconnector project, to go on stream in 2014, has been going on since 2007.
“Even if Labour were to discard all existent rules and all EU directives, it will still be impossible to have this project up and running in two years.”
Costs also played an important part in the PN’s criticism. According to Mr Fenech, Labour has purposely underestimated the cost of the project to make it appear feasible.
The costs, according to the PN, will total €600 million rather than the €308 million Labour says will be covered by private investors.
While Labour said that a gas-fired 200MW power plan will cost €166 million, a 2009 proposal by Bateman for an identical facility generating 150MW was offered for €186 million.
This means the plant proposed by Labour, which includes another 50MW, will cost some €240 million – an additional cost of €74 million.
The PN said Labour’s proposal also left out some €40 million needed to install concrete foundations for the building of liquefied natural gas (LNG) tanks and €150 million for the acquisition of three tankers to ferry gas from abroad to Marsaxlokk.
The infrastructure will also needed a €50 million jetty where the tanker would be berthing.
The lack of technical and financial details has also been criticised by the PN. According to Mr Fenech, nowhere in the world would one find a power purchasing agreement as the one mentioned by Labour, where the private sector would guarantee a fixed rate for generation when the price of natural gas, as all other fossil fuels, fluctuated constantly.
He said the plan put the future of Enemalta workers in jeopardy because they would only be working at the extension already in place as all the other facilities would be run by the private sector.
Mr Fenech insisted that the LNG tanks Labour was proposing to build in Marsaxlokk would have to be twice the size mentioned to have the necessary capacity to fire the new power station.
He challenged Labour to publish the detailed studies it had commissioned on its proposal.
“If Labour won’t, this means this is just another gimmick,” he said.