Malta’s request for European funds to partially finance the gas pipeline to Sicily “seems to have been accepted” although the country was still waiting for the official reply, Prime Minister Lawrence Gonzi said yesterday.
He said the pipeline, costing an estimated €250 million, would enable his government to convert the Marsa power station into a gas-fired plant and use the savings to lower electricity tariffs.
Speaking on the Nationalist Party’s television station, Dr Gonzi warned people not to vote for change for the sake of it because change could be for the worse. Labour leader Joseph Muscat had a history of bad advice, he said.
International audit firm KPMG had estimated a five per cent increase in tariffs if Labour acted on its proposal to build a gas-fired power station in Delimara, he said.
While Labour said its plan would cost €367 million, it would turn out to cost some €600 million, Dr Gonzi insisted.
He added that agreements to fix gas prices for 10 years, as proposed by Labour, did not exist because no one would be prepared to take a risk for such a long time.
He said that a €600 million venture could not be treated in an amateurish way and Dr Muscat’s promise to resign if the plan failed would have a serious effect on the country’s finances. Potential investors could use this pledge to force Dr Muscat to accept their offer or back out of the project.
Dr Gonzi said the Government had considered closing the inefficient Marsa power station but this was providing half of Malta’s energy, so it obtained EU funding for an interconnector, which would also provide high speed internet through a fibre optic cable.
Linking Labour’s proposal to Standard & Poor’s recent downgrade, Dr Gonzi said the party’s “half-baked” energy proposal made the credit rating agency have some doubts.
Labour’s decision to vote against the Budget, despite agreeing with the measures this proposed and promising to implement them if in power, also contributed to this situation.
He was confident the downgrade would be reversed when the Budget passed after the election and said Malta’s finances were sound. The Government had cut income tax for four years running, introduced a tax band for working parents, sent people for free healthcare abroad, saved jobs, raised childcare allowances and incentivised SMEs through schemes such as MicroCredit and MicroInvest.
Rebutting Labour’s claims that only 4,000 jobs had been created, Dr Gonzi said 20,000 students had graduated over the past five years and, had the Government only generated 4,000 jobs, 16,000 graduates would be looking for work.