The election campaign sparked an important debate on Malta’s future strategy for generating an affordable, environment-friendly and safe source of electrical energy. As was to be expected in an electoral contest the debate was characterised by very heated arguments made by experts, pseudo experts, politicians as well as political wannabes. But the overall outcome of this debate has been useful.

We still need to address Enemalta’s legacy financial weaknesses- John Cassar White

The context of this debate was graphically described by the European Commission in May 2012 when it included this sobering comment in its report on the Maltese economy: “Features of Malta’s energy system continue to pose a challenge to the economy’s growth potential. Energy supply depends almost exclusively on imported oil, which renders the country vulnerable to increases in oil prices and puts pressure on the current account, while the share from renewable sources is still marginal and energy efficiency could be improved. In addition, electricity tariffs for both households and industrial consumers are very high in comparison to other EU member states.”

The Commission’s report goes further and says: “High electricity tariffs may hamper the competitiveness of its small and medium-sized enterprises. Addressing shortcomings in energy efficiency could bring the double benefit of improving competitiveness and achieving energy and climate targets.”

What is lacking in the way we are tackling this economically debilitating threat is the sense of urgency. In the past, the only substantial debate on this issue related to the poor financial performance of Enemalta that is indeed disastrous as well described by Standards and Poor’s when it downgraded Enemalta’s credit rating to B+, an unenviable junk status in February 2012.

In this context, one cannot but be satisfied that the PL’s energy proposal has brought back the issue of the importance of a sustainable and efficient electrical supply to the top of the list of national economic priorities. This proposal is well thought out and merits to be treated as a viable way forward to address the issues raised by the European Commission.

Like every other strategy, it needs to be refined and followed by the more difficult exercise of converting the concept into a workable action plan to turn it into reality. This is a major project and like similar projects calls for proper risk management to ensure that it delivers most of the promised benefits.

A strong steering committee made up of technical and financial experts needs to be set up to take responsibility for defining a project plan and eventually implementing it. Some changes from the original concept may need to be made as realities start to emerge.

But this should not be a show stopper. Having a modern, gas-operated electricity-generating system is a reality that already exists in many countries. We have some very talented people who can take care of every aspect of this challenging project and where our skills are lacking we can always hire experts from other countries.

The risks of not doing little, or resorting to outright procrastination as we have done so far, are much more serious than embarking in earnest and with a sharp sense of urgency on this project that could have enormous economic and social benefits for our country. One hopes that political bickering and nit picking will not dissipate our commitment to bring about the much needed change in the management of our energy supply services.

Quite apart from the technical challenges of making clean and affordable electrical energy a reality, we still need to address Enemalta’s legacy financial weaknesses. The poor state of our electricity utility finances has been a major factor behind our recent downgrade by Standard and Poor’s. Restructuring of the €800 million debt remains a major task that needs to be addressed with urgency by the next administration.

The setting up of a special purpose vehicle to achieve this aim could be one viable option. I believe a neater solution could be the setting up of an investment bank that caters for the financing of productive infrastructural projects.

This can take some time to materialise but the present precarious situation of our national debt calls for urgent action to create the right mechanisms to deal with urgent infrastructure projects that are badly needed to optimise the growth potential of the economy.

The next few months will be among the most economically challenging in the last several decades. Dealing with our electrical energy problems will be one of the most demanding but potentially also the most rewarding.

johncassarwhite@yahoo.com