The Finance Minister yesterday raised questions about the price guarantee being given by the Norwegian company promoting a coal-fired plant, saying there were a number of “uncertainties” in their proposal.

“It seems that the final price will not match the proposed price at face value,” Mr Fenech said, arguing that the coal price listed by the Norwegian firm Sargas was lower than the actual market price.

The company is giving a price guarantee of 7c5 per unit, almost half of that produced by the power stations.

“But if, as expected, the contract states that the company has to be compensated if the price of fuel varies, then it defeats the whole purpose,” Mr Fenech said.

He was speaking on discussions programme Bondi+ which focused on Sargas’s proposal to build a €900 million power plant that works on coal and biomass.

Presented last week by Sargas CEO Henrik Fleischer, the plant is estimated to cost between €800m and €900m. The company is proposing to fund the cost of construction itself and guarantee the output price in exchange for a long-term service contract with Enemalta.

Mr Fenech admitted that this price per unit, presented by Sargas, was cheaper than that produced by Enemalta.

“But there are missing elements such as the price of distribution” which was included in Enemalta’s tariffs and should be added onto that of Sargas, he pointed out.

However, he said that, before taking any decisions, the government was going to “seriously” look into these elements and had started off a process to hire financial experts to draw up an independent opinion on the Sargas proposal.