The energy sector has once again dominated the headlines with news of a massive €360 million State guarantee to build a new gas power station as well as the frustrating and most unwelcome cuts in electricity supply which have unfortunately become a regular feature of Maltese life over the years.

The announcement that the government guarantee to cover a bank loan for Electrogas – the private consortium selected to build the new power station – has shot up from €88 million to €360 million, has certainly raised eyebrows as well as questions. The initial gua­rantee of €88 million – taxpayers’ money to cover private investors – was controversial enough, but the massive increase in the guarantee is a huge risk for the government and a potential burden on taxpayers.

It is also not clear whether the call for proposals and the expression of interest for the new power station had included such a guarantee. If not, then this was clearly unfair on other potential bidders for such a tender. The government’s management of the energy sector has been contentious since Labour was elected to office two and a half years ago.

True, the government has kept its promise and reduced energy tariffs, to the benefit of consumers and businesses alike; it has also made progress in making Enemalta a viable company after inheriting a very difficult situation, and it has closed the Marsa power station.

However, the government has refused to publish the contract involving Shanghai Electric, the Chinese company that bought a 33 per cent shareholding in Enemalta, as well as full ownership of the BWSC power station in Delimara, leading to speculation about the deal.

Furthermore, despite Prime Minister Joseph Muscat’s pre-electoral pledge that the new gas power station would be operational by March 2015, the construction of this pro­ject has only just begun, and is not expected to be up and running before June 2016. Another controversy erupted when it emerged that Gasol, a UK energy company, dropped out of the consortium building the new Delimara plant.

Gasol had been the lead partner in the consortium and its exit from the project raised questions on the due diligence conducted on the company during the bidding process. On July 12, less than two weeks before it announced it no longer formed part of the consortium building the power plant, The Sunday Times of Malta had reported that questions were being raised over Gasol’s financial strength.

Data emerging from Gasol’s latest financial statements showed that the company, recently de-listed from the London Stock Exchange, could have problems raising cash for its ongoing projects.

In addition to the controversies surrounding the new power plant, Malta has continued to be plagued by widespread cuts in the supply of electricity, causing undue hardships to citizens and numerous businesses, as well as harming the tourism industry, a key pillar of our economy.

A massive blackout in large parts of Malta took place in July, supposedly caused by a fault in the cable network, and another one just over a week ago, caused by problems with the interconnector between Malta and Sicily.

Although the government had initially stated that this month’s outage was triggered by a fault on the Sicilian side of the interconnector, the Times of Malta reported this was not the case, and that the power cut was caused from the Maltese side.

An initial statement from the Italian company managing the Sicilian grid, Terna, pointed out this was the case.Enemalta has continued to deny that the widespread power cut was caused by faulty settings at Malta’s end of the interconnector, and is insisting it was caused by a lightning strike in Sicily.

Maltese consumers and businesses, however, are not particularly interested in who is to blame, but simply want an end to such interruptions of their power supply, which is more characteristic of a Third World country rather than a modern EU member state.

While tackling power cuts must be a top priority for the government it must also be more transparent in its energy dealings. The taxpayer deserves to know the full picture in what is an essential sector.

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