Electricity prices generated with gas will not be fixed for 10 years, as promised, but “a minimum of five”, according to the call for expression of interest seen by The Times.
No explanation was provided by the Energy Ministry, which stressed that a “commercially sensitive process” was underway.
“The commercial decisions will be made at a later stage of the process and will be informed by the proposals received and commercial advice received to safeguard the national interest,” a ministry spokeswoman said.
During the election campaign, Labour said it would seek a 10-year fixed-price agreement to make this a “safe investment” for the winning bidder, while guaranteeing constant prices.
The PN had questioned the feasibility of this idea, warning that no company would be willing to set the prices for a decade and expose themselves to potential changes in the industry.
Labour’s pledge to reduce electricity tariffs by 25 per cent was one of the most talked about proposals during the election campaign.
Labour’s plans were outlined by Konrad Mizzi, now Energy Minister, and has just issued an international call for expressions of interest.
According to this document, which the ministry refused to publish, the fixed-term contracts for both gas supply and power purchase “will have an initial fixed price for a minimum of five years from commencement of commercial operations”.
This would be followed by “an indexed price” for the remaining period, the document states, without specifying what this meant.
And while Labour’s original plan had envisioned the 10-year agreement to be extendable to 25 years, the call for expressions of interest stipulates the contract’s duration to be 18 years instead.
State utility Enemalta is seeking to sign two contracts: a gas supply agreement to fuel the Delimara power station and a power purchase agreement to buy electricity generated by a new power station. The deadline for the project is March 31, 2015.
The Sunday Times reported in January that a 10-year fixed-term agreement was possible, but this could work against Malta if the global price started to decrease.