Enemalta could have saved millions of euros had it opted to heed advice to hedge oil prices earlier, an economics professor told the parliamentary Public Accounts Committee today.

Prof. Joe Falzon, a board member and chairman of the corporation’s fuel procurement advisory committee between 1999 and 2003, recounted how he had always been a staunch believer in hedging of oil prices, but it had been an uphill struggle until the board had given its first-ever approval in mid-August 2005.

Hedging when he first suggested it, with oil prices at rock bottom, would have saved the corporation $111 million in 18 to 24 months, he said. But the corporation had never saved a cent in this sense because the board did not approve, even though he was only pushing for the hedging of part of the supplies.

Some amount of hedging had only been done between 1996 and 1998 under the government of Alfred Sant.

He also recounted how Enemalta had received a cash injection of €33 million simply by converting a $120 million loan back from euro to US dollars in 2000. The transaction had also saved $6 million in interest.

Prof. Falzon said that even in 2000 there were millions of liri in unpaid utility bills, and besides six per cent natural losses of energy production according to engineers, there was also an unexplained loss of 10 per cent.

He said he had never met then-minister Austin Gatt, and when he had insisted he had been referred to the PN club at Santa Venera for an encounter that had lasted just five minutes. The minister had flatly refused to allocate two graduates to Enemalta for research, even though the professor argued for six. Prof Falzon said he therefore did not engage anyone and the former minister's claim that he had done so was wrong and should be withdrawn.