Opposition finance spokesman Karmenu Vella told Parliament yesterday that while the Opposition would support the setting up of the special purpose vehicle for the restructuring of Enemalta’s debts, it wanted to register that it was not an accomplice to the corporation’s dire financial situation.
He said that before the 2008 election, Prime Minister Lawrence Gonzi had assured Enemalta workers that it would strengthen the corporation. On the contrary the government let the situation worsen, resulting in the corporation’s present financial difficulties.
He complained that the Opposition had limited information because the corporation’s last audited accounts tabled in Parliament went back to 2010.
The corporation made a profit of €21 million in 2010 and a loss of €15 million in 2011. For 2012, the corporation estimated a loss of €56 million but actually made a loss of €90 million, reduced to €65 million after the government paid it €25 million for public service obligations. The corporation estimated losses of €68 million for 2013.
Mr Vella said that problems for Enemalta arose when debts were reaching maturity stage. This problem became more serious because the corporation needed to make further investments and was finding it difficult to borrow.
He said that the setting up of the SPV was a short-term solution because it did not consider another loan amounting to €150 million for the interconnector project. Its debts in 2013 would amount to €517 million and not €365 million.
The Government did not yet know the unit cost of electricity to be generated by the interconnector. This meant that in reality Enemalta’s debts would not decrease from €835 million to €318 million after the resolution’s approval but to over €500 million because of the interconnector loan.
Mr Vella said that while the extension of Delimara remained non-operational, the Marsa Power Station would be used, with its efficiency being much lower than that of Delimara. This would lead to higher electricity tariffs. Malta was also risking paying more penalties due to emissions.
Enemalta’s situation was a result of wrong decisions which were directly affecting tax payers. The Government originally planned to use gas rather than heavy fuel oil, but for some reason or another, this decision was changed. This was one of the reasons which led to Enemalta’s financial disaster.
The Prime Minister said yesterday that Malta’s tariffs were among the cheapest in Europe. Mr Vella said this was not true, because according to the Eurostat, the price of electricity for household consumers in Malta, at 16c/kWh, was the third highest charged by the 27 EU-member states after Cyprus with 23c/kWh and Ireland with 18c/kWh. With regard to electricity for industrial use, Malta had the second highest price – 18c/kWh.
The average price of the European countries was 9c/kWh.
In recent years, the tariffs quadrupled and economic growth was impossible. The Opposition’s target to have lower tariffs was a strategy to have higher economic growth.
The main problems of Enemalta were financial, technical and operational.
Opposition spokesman on energy Joe Mizzi also contributed to the debate, which was wound up by Minister Fenech.