The cost of a gas pipeline between Malta and Sicily has risen by €138 million since 2003, according to a document submitted to the planning authority by Enemalta.
From a projected cost of €93 million in 2003 (according to a study carried out by Italian energy corporation Eni), the soaring cost of raw material drove the pipeline’s price tag up to €117 million in 2006 while now, according to an Enemalta report submitted for environmental permitting, the pipeline would cost at least €231 million.
The report – which was distributed to the media during a press conference by Labour spokesmen yesterday – also says that the estimated cost of converting the existing power station to run on gas is €35 million and €27 to convert the extension.
It also acknowledges that the €35 million to convert the existing power station would be “more than covered” by the savings on running costs and emissions.
Speaking near the Delimara power station, Labour MP Evarist Bartolo said that, on September 12, 1999, then-minister Josef Bonnici had said the government was investigating the possibility of having a gas pipeline between Sicily and Malta to run both power stations, claiming this would be “the best millennium present” the country could get.
The press conference was intended to continue piling pressure on the government over its 2009 decision to accept the offer by Danish company BWSC for the extension of the Delimara power plant using heavy fuel oil over that of other bidders proposing the much cleaner gas-powered plants. MP Joe Mizzi accused the government of not investing in the infrastructure on time and of using and favouring people in the government’s “inner circle, who, in turn, did very well” with the move to heavy fuel oil.
Both spokesmen said the use of heavy fuel oil would result in bigger costs to consumers and, subsequently, heftier energy bills, which Labour has pledged to reduce once in power.
Mr Bartolo questioned which country would be taking the hazardous waste produced by the plant and at what cost.
Even though the controversial power station extension still has not started functioning, Prime Minister Lawrence Gonzi said that in his February meeting with Muammar Gaddafi he was asking for Malta to buy gas at the same preferential rates as Italy in view of the power station eventually running on gas. Later on, he said that there were financial and infrastructural obstacles for the plant to run on gas.
The Enemalta report, however, says heavy fuel oil turned out to “be marginally more advantageous from an economic viewpoint, that is taking also into account the cost of emissions,” which, in the case of gas, would be cheaper because it is cleaner but clearly not enough to warrant a move to it based on financial considerations.
That said, “the economic advantage of HFO relative to gas may be eroded chiefly by higher electricity demand and by an increase in the shadow prices of emissions, among other factors,” the report says.
Risk considerations, the report says, do not point to any type of fuel being preferred over another.
In its reaction, the government said Labour did not take into account the fact that the price of oil at the time was much lower than it is today. Therefore, investing in infrastructure that ran on gas was not viable. The opposition should have predicted the price of oil and gas in one to two years’ time and not said what it was 10 years ago.