It is common belief that the construction of a new, gas-fired power plant in Delimara has been, arguably, the most discussed topic for nearly the last four years. Everything started on January 8, 2013, when Labour leader Joseph Muscat, flanked by his deputy leader and Labour candidate Konrad Mizzi, unveiled their proposal to convert the Delimara power station to a gas-fired power plant.
Since then we had been inundated with facts, figures, updates and speculations. In order to find how we arrived at the point where we are right now, I experimented with an unusual exercise.
I am going to recount what happened without adding a single comment of my own. I will rely solely on what our three Maltese papers in English (the Times of Malta, Malta Today and The Malta Independent) reported. Comments from other sources are duly attributed. Obviously, this is not a technical review. I will only look at the project from the eyes of the average reader after having digested much of the published information.
During a press conference at its headquarters in Ħamrun, Labour announced that it would complete the project within a two-year time frame. A Labour government would enter into a 10-year fixed-term electricity contract with the company chosen to build the new plant during which Enemalta would buy the electricity produced.
Mizzi said that two tanks would be built, with a capacity of 30 metres cubed each and with a diameter of 20 metres. He said the residents of Marsaxlokk would welcome the project because the chimney would be removed and air quality would improve as a result.
Enemalta is paying an undisclosed sum of money running into tens of thousands
of euros a day to Shanghai Electric to use the BWSC plant in Delimara
The BWSC extension would remain the property of Enemalta.
Joseph Muscat denied the Labour Party had any companies in mind. “This is not a done deal. This is not a proposal belonging to any company,” he said, while declaring that Enemalta would not be privatised and that employees’ jobs were guaranteed.
The Labour Party’s preferred option was the LNG terminal, by which gas would be transported by tankers to Delimara. Mizzi explained that the two large tanks could store a month’s supply of gas. He said that a Labour government aimed to close the old Delimara plant by 2015.
He added: “We’re calculating a 60-day period on permits… The design of the power station won’t be new… We are confident that the safety case can be delivered in three months. Our partner will be able to hit the ground running and implement the project within 18 months.”
The Labour Party won handsomely the 2013 election and Mizzi, as energy minister, started to put in practice his announced plans.
In October 2013, he called a press conference and said that the project management of the selection process was unprecedented and never seen under the previous PN administration. He said the bidder would sign a 15-year agreement and provide a fixed price for five years.
Mizzi announced that the winning consortium was made up of Siemens as lead developer, Gasol plc as lead member, Socar Trading and GEM Holdings, made up of locally established companies including Gasan and Tumas Group of Companies.
Time elapsed and on October 12, 2014, Muscat said his government would miss the March 2015 deadline for the new gas-fired power station while claiming that the delay would only be for “a few months and not years”.
In the meantime, Chinese state-owned company Shanghai Electric Power (SEP) purchased the BWSC plant for €220 million. An energy deal signed between China and Malta saw SEP take a 33 per cent equity stake in Enemalta (China Daily, March 13, 2014).
It was later reported that the President’s staff had been boosted throughout 2015 by more than 40 former Enemalta employees. They were doing maintenance jobs like cleaning and other things which are very far from what they used to do at Enemalta.
Electrogas Malta announced on July 24, 2015, that Gasol – a leader member – has been removed from a “new and improved company structure”, which will now be composed of Siemens, Socar and GEM Holdings. This meant that the power station, which was meant to start operating from months before, had lost an important company in the consortium.
During 2015, the government authorised an €88 million guarantee to cover a massive bank loan for the private consortium selected to build the new gas power station.
Later it transpired that the state guarantee had shot up to €360 million. This was revealed by the government to chosen sections of the local media.
Addressing Parliament at the end of 2014, Mizzi said that the power station would be producing commercial electricity not later than June 2016.
As time continued to roll on, the Prime Minister said that government would meet its fresh deadline for the power station in Delimara to start generating clean energy in the summer months of 2016.
However, in May 2016, repeatedly asked to explain the latest state of play on the ongoing project and to say when the power plant was expected to deliver its first commercial supply of energy, Muscat did not reply.
By that time, Wakaba Maru (built in 1985) was chosen to supply a floating storage unit (FSU) to Malta’s planned LNG-import project. This ship (later named Armada LNG Mediterrana) was up for scrap or trading sale by Mitsui OSK Lines (MOL). At the time, brokers slapped a price ticket of $18 million to $20 million on the ship. The unit was due to be in position in Malta from June 2016 under an agreement on the FSU that runs over 18 years (Trade Winds, October 10, 2015).
Armada LNG Mediterrana, which had been under conversion at Keppel Shipyard in Singapore since 2015, was originally scheduled to be in position off the east-coast port of Delimara by the end of June (2016), but complications on the life extension work and the integration of new systems on the vessel meant the original timeline on the conversion job slipped (Tradeways, August 4, 2016).
Back in Malta, Enemalta is paying an undisclosed sum of money running into tens of thousands of euros a day to Shanghai Electric to use the BWSC plant in Delimara. Enemalta said that despite the plant having been sold to Shanghai Electric in December 2014, it had taken possession of the facility until the conversion of the turbines into gas was completed.
A sail-away ceremony presided over by the Prime Minister for the floating storage unit Armada LNG Mediterrana was held in Singapore on August 1, 2016. A statement by the government said the ship was expected to arrive in Malta in September.
The latest twist in all this whole saga came a few weeks ago when it became known that notwithstanding the sail away formalities in Singapore, the Delimara power plant will miss its third self-imposed deadline and will not be generating any electricity by the end of this summer, as had been promised by the government.
This is where the sage ends for the time being. No further comment on my part, but only one relevant question: are you sure that this is the same power plant brandished so eloquently and lavishly prior to the 2013 election that we supposedly so desperately needed?
Kristy Debono is the Nationalist Party’s spokeswoman for financial services, IT and gaming.