Nationalist MPs this morning warned of the increased danger posed by the growth in gas storage requirements for the new power station in Delimara. The warnings were made during the debate on the Enemalta financial estimates, with Nationalist MP George Pullicino saying that those conducting the safety-related studies would be held personally responsible.
Earlier, Energy Minister Konrad Mizzi said at the opening of the debate that Enemalta has spent €5m on emission abatement measures since the new BWSC power station was commissioned, a consequence of the former government's decision to opt for heavy fuel oil.
Dr Mizzi said the corporation would this year make a loss of some €49 million, €16m less than the previous year.
The corporation was owed €160m from customers including €11m due for the past five years.
He regretted that the interconnector project had fallen back, to the extent that when the new government took over, the Italian authorities had still not issued planning permission. The permit was eventually issued, a year late.
Plans were for the interconnector to be completed next year.
Dr Mizzi said losses from power generation to billing were 12 per cent of generation, and no progress on this front had been made over the past few years. The losses stemmed from transmission losses, which were being tackled, billing errors and theft. In this context too, the installation of smart meters had been speeded up.
The corporation, he said, was working to reduce power interruptions through further investment in the distribution sector since the level of power cuts in Malta was among the highest in Europe.
PETROLEUM DIVISION
Turning to the Petroleum Division, Dr Mizzi recalled that the privatisation process started some seven years ago. A review was launched by the present government which decided to also include the MOBC and the fuel storage facilities.
The process, he said, would be discussed with the Opposition. One had to be careful about privatisation, he said, because this is a profitable sector for the corporation. It was also important that consumers had competition at the pumps.
DEBTS
The minister said Enemalta's debts were huge. The corporation had still not repaid the capital on the loan to build the first phase of the Delimara power station. The former government decided with agreement from Labour, to set up a special purpose vehicle to start paying off this 25-year debt. The repayment had now started at €18m a year plus another €14m in interest on various loans. Payment for the first Delimara power station would take 25 years.
Dr Mizzi said the government would promote the use of renewable energy and a new plan would be unveiled in the coming months.
The minister said the corporation had beefed up its internal controls and an internal audit department started working in April.
A manpower resources audit was under way.
He said the corporation was looking into the commercialisation of properties which were not within its core business, such as the old Sea Malta Building, properties in Corradino and the former Qajjenza plant.
He said a turnaround plan for Enemalta was being drawn up, including provisions on new generation facilities, greater efficiency in revenue collection, better management and improved work processes.
"Having no change is no option," Dr Mizzi said, adding that with the plan in place he was confident that Enemalta's position would improve substantially.
He also reiterated the government's commitment to reduce tariffs as promised in the general election. In this context, the plans to involve the private sector in power generation were well on target, he said.
DIFFICULTIES OF ON-SHORE GAS STORAGE FACILITIES
Nationalist MP Ryan Callus asked if the government preferred to have a gas storage facility offshore rather than alongside the new power station, perhaps after having realised that claims that the land was unsuitable without reinforcement were true. Was it a case also that having the storage facilities at sea would be faster to commission?
Indeed, while the original plans was to had a storage facility 60,000 cubic metres of gas, it now appeared that this had been revised to 180,000 cubic metres of gas, as the Opposition had predicted. This further showed how the only real option was to have a gas storage facility offshore or in a tanker berthed at Marsaxlokk because land space was limited.
But what would be the consequences on Marsaxlokk? How would such a monster 300m ship affect the vista of Marsaxlokk?
What had happened to the consideration of having a gas pipeline?
He also asked whether the old Delimara power station chimney would be replaced by another which would be just as high.
Former Minister Tonio Fenech said the projection of a loss of just under €50m appeared to be optimistic and the corporation could end up with higher losses, possibly higher than in 2012 because of high oil prices.
It was a certificate to the former government, Mr Fenech said, that the present government had kept all the members of the management and their consultants, while only replacing the chairman. This meant there had been no mismanagement at Enemalta. What used to be said about the losses being the result of fuel costs, not dismantlement, was being shown to be true.
Furthermore, under this government, the projection for operational costs were being raised, not reduced.
Mr Fenech insisted that Malta does not need a new power station.
BIGGER GAS STORAGE REQUIREMENTS, BIGGER DANGER
He also noted that gas storage requirements were rising such that instead of two tanks the size of Mosta done, six would now be needed. They would be 45 metres high.
Wasn't anyone realising the potential danger and environmental hazards of this situation?
The government, he said, was rushing the project through in order to meet its electoral commitment. But the people, he said, should never be put in danger.
George Pullicino (PN) said the people carrying out studies related to safety standards would be held personally responsible should there be an incident.
He said that in view of the electoral promises, the Labour government had a moral duty to immediately start using diesel instead of heavy fuel oil at the Delimara power station and not wait for gas. Why had that not happened already? Wasn't the power station a cancer factory any longer?
JUNK RATING
Winding up, minister Mizzi said the status quo at Enemalta was unacceptable. The corporation had a debt of €800 million and its rating had been reduced to junk level. When he asked what the former government had planned to do about the situation, he was told that tariffs would have gone up by 30 per cent.
Dr Mizzi said all safety studies, as well environment studies would be held. The people of Marsaxlokk knew that the building of a new power station would mean cleaner air and less asthma. Talks were continuing with Marsaxlokk council. LNG was a safe industry and Malta would have world glass safety standards.
It was true that the new power station would have a chimney, but it would be shorter than the old one at Delimara, he said.
He also promised that the site of the Marsa power station would be rehabilitated once that old power station was closed.