A former Enemalta manager has insisted that Austin Gatt scrapped a “favourable” gas pipeline deal a decade ago, despite the Infrastructure Minister’s declaration that it did not happen under his watch.

Dr Gatt yesterday denied ditching a gas pipeline deal with Italian energy giant Eni in 2003, saying the Cabinet took the decision before he became minister responsible for Enemalta.

Dr Gatt also told The Times the deal would not have translated into cheaper bills because of the exorbitant cost to build the pipeline.

He was reacting to comments made by former Enemalta manager John Pace who blamed Dr Gatt for losing the beneficial investment when he replaced his predecessor Josef Bonnici in 2003 as minister responsible for Enemalta.

“When I became minister, the decision had basically already been taken. Formally, it could have been taken under my jurisdiction but everything was already concluded,” Dr Gatt said.

Two proposals were studied at the time, Dr Gatt added. In early 2001, the Government discarded the idea of using a T-junction to connect Malta to the GreenStream pipeline that was eventually laid between Italy and Libya.

In early 2003, the Government discarded a second option for Malta to link to Eni’s station in Gela, Sicily.

But Mr Pace insisted the decision to scrap negotiations with Eni was taken under Dr Gatt’s watch.

He said Dr Gatt appointed a new Enemalta chairman, Tancred Tabone, who engaged a petroleum economist, John Gault, to study the financial aspect of the project.

Mr Pace also insisted that this study showed the final cost to be “favourable”.

“My opinions may be wrong...” Mr Pace said yesterday, referring to his original claim that Dr Gatt ditched the project because he wanted to reject everything started by his predecessor. “But these are facts.”

Enemalta has not yet replied to a question by The Times which could shed more light on the issue.

Meanwhile, when contacted, Mr Tabone said he could not remember whether he had commissioned a cost study on the proposal.

But Dr Gatt and Finance Minister Tonio Fenech yesterday both gave reasons why the pipeline promised at the turn of the millennium never materialised.

Dr Gatt said laying the pipeline would have cost €300 million and even though this would have been covered by Eni, it would have been factored into the final price of the gas, which would have become prohibitive.

Neither did it make sense to agree to the 25-year contract proposed by Eni, which would have forced Malta to pay for gas it did not consume, the minister said.

“Also, it wasn’t quite the time to change the power stations and make them fired by gas,” said Dr Gatt, who during this legislature invested in a heavy fuel oil extension of the Delimara power station.

The extension by Danish company BWSC became the source of much controversy during the past few years amid criticism by Labour that the Government should have continued to pursue the gas option.

Switching Malta’s energy source to gas is one of Labour’s main electoral planks as it is proposing a gas terminal as well as a new, privately-built gas power station.

The Nationalist Party said it makes more sense to opt for a gas pipeline financed by the EU since it would lead to even cheaper bills.

The Times yesterday also asked Finance Minister Tonio Fenech, now responsible for Enemalta, whether the Government was really committed to a gas pipeline, seeing it had moved away from the idea in the past.

“Yes, we are going to do it. In fact, there are active discussions with the European Union about its financing. We also issued a feasibility study on which the EU will base the amount of financial assistance it would offer on this project.”

The reason the Government never invested in gas before was because without financial assistance from the EU, consumers would pay more, he said, pointing out that he had not entered national politics in 2003 and was not involved in the decision to scrap the pipeline.

“That is why Labour’s strategy is wrong. Today, the EU has committed to helping us. And the pipeline will take five years to be constructed, which is the same time of Labour’s project will take.”