An Opposition motion calling on the government to publish all Delimara power station contract is being debated by Parliament in a six-hour sitting this morning.
The motion is signed by PN deputy leader Mario de Marco and shadow ministers Marthese Portelli and Claudio Grech.
Piloting the motion, Dr de Marco said the contracts published on Tuesday and yesterday would not even allow the Opposition to make an autopsy of the situation because there are so many blanked out or white-washed pages that there were only limbs, not a whole cadaver.
The government had entered into agreements which led to a loss of choice for the consumer, he said.
He noted that the debate came a day after the government published heavily redacted versions of the requested contracts, in spite of the Opposition’s request for the debate to be postponed by a week.
This request, he said, had been prematurely optimistic, as so little of what had been asked for had actually been published. He showed the House page after page of redacted text, saying that only irrelevant sections had been left untouched.
Most crucially, every reference to the energy and electricity tariffs by ElectroGas and Shanghai Electric had been blacked out. No indication was given of how much electricity the government had committed itself to purchase over the next 18 years. This left the Opposition with no way of determining the ultimate cost to the Maltese taxpayer.
The government refused to offer even the most basic of information, simply repeating that its energy policy had led to the reduction of the electricity tariffs.
Despite these claims, he argued, the reduction in tariffs had wholly been due to the previous administration’s investment in the BWSC plant and the interconnector, as the main planks of Labour’s energy plan had not yet begun to operate. The BWSC plant was still running on heavy fuel oil (HFO), and the ElectroGas power station had yet to start to operate.
Concluding, he asked whether the contracts signed by the government had compromised its ability to choose the best price for the purchase of electricity.
From the limited information available, it seemed as though the government had tied itself to agreements that obliged it to purchase the bulk of its energy needs from ElectroGas and Shanghai Electric at prices higher than those available through the interconnector.
Tourism Minister Edward Zammit Lewis said that the government’s energy policy meant the consumer benefitted from reduced tariffs, cleaner air, stability and flexibility.
The government’s decision on Enemalta led to credit agencies reversing their negative ratings and had no action been taken, Enemalta’s €1 billion debt would have destroyed banks and the Maltese economy.
Claudio Grech (PN) said the Opposition’s motion was even more relevant now that the contracts had been published, as what had been omitted was an obstacle to the House’s ability to understand the “value for money” of the government’s agreements with ElectroGas and Shanghai Electric. These represented the largest agreements ever entered into by the Maltese government with a private consortium.
Events leading up to the motion had included the loss of €14 million due to a disadvantageous hedging agreement with SOCAR (State Oil Company of Azerbaijan Republic), repeated delays to the power station project which had originally been slated for completion in March 2015, and the government’s unprecedented guarantee of €88 million in financing granted to ElectroGas by Bank of Valletta.
In the absence of the Expression of Interest and the Request for Proposals, it was impossible to ascertain whether the latter guarantee had been offered to all potential investors, or whether the terms of the agreement had changed to include it after the tendering process had been completed.
Minister Josè Herrera countered that through the government’s energy policy, the Maltese were enjoying a quantum leap in environmental quality because of the changeover from HFO to gas.
The Environmental Authority had, by eight votes in favour to one against, took a decision that closed down HFO era and strengthened the guarantee of reduced tariffs.
Were it for the Opposition, he said, the Marsa power station would not have closed down. Today, on average, carbon dioxide emissions amounted to 7.8 tonnes – far less than EU levels.
Edwin Vassallo (PN) described the published contracts as the “mother of all evils”.
Finance Minister Edward Scicluna said that the arguments put forward by the Opposition against the Government’s energy policy were “more heat than light,” motivated by the fact that the PN’s bad decisions in the sector had cost them the election.
During the tenure of then-Energy Minister Austin Gatt, tariffs had tripled to a level that had brought the country to its knees. The PN administration had also lost an opportunity to connect the Maltese Islands to the European Gas Pipeline because its officials had had a vested interest in the continued use of HFO.
Prof. Scicluna added that whilst it was true that a bank guarantee such as that granted to ElectroGas by the government was unorthodox, “there’s always a first”.
The previous administration had also made use of unorthodox measures to finance the construction of Parliament, and to manage what it still owed for Delimara 1.
As confirmed last month by the European Commission, state aid of this kind was allowed in cases of market failure. The government knew this, but chose to act in anticipation of the Commission’s decision because “it had no time to waste”.
With a blacked-out page from the published contracts affixed to the front of his jacket, Opposition MP Ryan Callus, said that Labour MP Etienne Grech had admitted, for the first time, that the power supplied over the interconnector was cheaper than that which was supplied by ElectroGas and Shanghai Electric.
He said this made sense, for if energy bought from the latter were truly cheaper, the Prime Minister would have boasted about it. But as things stood, Labour’s “Alice in Wonderland” would soon disappear if details were made public.
Mr Callus said that the government had committed four future administrations to honour the agreement signed by Dr Mizzi, for reasons which were increasingly cast in shadow by information from the Panama Papers.
He said sources had informed him that Shanghai Electric were entitled to €500 euro for every hour a turbine was on standby, amounting to €100,000 per day for eight turbines. He challenged the minister to verify or deny this claim.
Prime Minister Joseph Muscat said that once the ElectroGas project was concluded, Malta would have self-sufficiency and spare capacity as mandated by EU energy directives, and as necessitated by the 7.5 per cent growth that the country was experiencing.
Challenging the leader of the Opposition to substantiate allegations that he was the owner of the third Panama company, Dr Muscat concluded by stating that the completion of the project would see Malta join the “civilised nations” when it comes to environmental standards in the energy sector.
Marlene Farrugia noted that although the price of oil was down by 66 per cen, consumers were only benefitting from a 50 per cent reduction in bills. She noted that the BSWC plant was efficient and production costs were therefore cheaper.Education Minister Evarist Bartolo said that if Enemalta was still the liability that it had been in 2013, investment in education and in the quality of life of the Maltese would not have been possible. He described the energy dependency which would result from an overreliance on the interconnector as a “dangerous colonialism”.
Education Minister Evarist Bartolo said that if Enemalta was still the liability that it had been in 2013, investment in education and in the quality of life of the Maltese would not have been possible. He described the energy dependency which would result from an overreliance on the interconnector as a “dangerous colonialism”.
More updates to follow.