Prime Minister Joseph Muscat skirted questions on how Enemalta settled a bill of €130 million in excise duty in the absence of the €320 million cash injection by Shanghai Electric Power.
“The payment was possible as we have been assured that negotiations with the Chinese have been concluded and the deal will be signed in the coming days,” Dr Muscat told Times of Malta at the end of a Malta-EU Steering Action Committee meeting, yesterday.
He was asked to confirm or deny whether the debt-ridden corporation had been forced to take a short-term loan to be able to pay the bill by the end of the year.
The delay to sign the deal with the Chinese company could have seriously jeopardised the government’s target to end the year with a 2.7 per cent deficit.
Dr Muscat said that a full explanation would be given once the agreement was tabled in Parliament.
A Finance Ministry spokesman told this newspaper the minister would be addressing the issue today when the Budget debate in Parliament would be concluded.
The deal, which was supposed to be signed last September, will see the Chinese State-owned energy company invest in Enemalta, in return for a 33 per cent stake in the corporation and the acquisition of the Delimara BWSC plant that will be converted to gas at their own expense.
Part of the investment would also be used to settle the money due to the government in unpaid excise duty on oil purchases, which the corporation was unable to pay due to its ailing financial situation.
Konrad Mizzi said the bill had been settled. He said Enemalta’s cash flow had improved but no further details were given. This fuelled speculation that the corporation had taken a short-term loan until the Chinese deal is sealed.
Subsidy clash
The government and the Opposition locked horns yesterday over a Budget allocation of €14 million to Enemalta for the provision of spare capacity electricity.
This is the first time Enemalta was allocated such funds, prompting the Opposition to cry wolf and describe this as a subsidy to make up for the financial mess caused by the gas power station delay.
The government retorted that the payment formed part of an EU directive that obliged member states to ensure they had enough spare capacity, equivalent to the largest electricity producing plant in case of power failure.
Next year, the 200MW interconnector would be Enemalta’s largest source of electricity, the government said. “The €14 million are funds intended for Enemalta to ensure it has security of supply according to European and global norms,” the government said.
But the Opposition was unconvinced, insisting EU directives did not oblige member states to pay electricity producers for spare capacity. “This confirms the failure of [Joseph] Muscat’s energy plan based on the completion of a new power station that should start working on gas in three months’ time, which project went off track by at least 15 months, which means lower energy bills will be financed by our taxes through a higher subsidy.”