Former Finance Minister Tonio Fenech yesterday told the Public Accounts Committee that Enemalta was at one time “financially beleaguered in a very difficult macroeconomic climate of high oil prices”.
Giving evidence as the committee continued to discuss the Auditor General’s report on the effectiveness of the corporation’s fuel procurement, he said its financial difficulties were a constant worry. It had been losing between $60 million and $70 million a year, which was not sustainable.
The BWSC plant had reduced the loss by €52 million a year and the interconnector was to continue addressing this fiscal imbalance.
He insisted Enemalta’s debt had never been anywhere near €850 million as alleged by the government but in the region of €350 million.
He criticised the government for its deal with Shanghai Electric saying the Chinese company had shouldered no part of the debt but only taken over the BWSC plant and other real estate belonging to Enemalta.
The government had an inbuilt system of checks and balances and this was the case for the recruitment which had been requested by former CEO David Spiteri Gingell, who had sought staff beyond the allocated financial parameters.
The request had been for an extra €4.5 million, with 10 chief officers and 45 management positions and other supporting staff. As a minister, he considered this as excessive and granted only part of the request, leading to Mr Spiteri Gingell’s resignation.
Even with minuting, there is no guarantee of transparency
The former Nationalist minister described the changes to the chairmanship of Enemalta and how he commissioned the chairman to assess the procedures used in fuel procurement.
While he appreciated the comment by the Auditor General that efforts towards more transparency were evident, the comment that there was “a policy vacuum” was not accurate since there was a process which constituted a policy framework.
The failure to keep minutes and documentation was not good governance, but it was not acceptable to say that minutes were not kept because to lack of staff, as Mr Spiteri Gingell had claimed.
Even with minuting, Mr Fenech stressed, there was no guarantee of transparency. The recent ministerial order to buy oil from Azerbaijan was clear evidence of this.
“This is direct ministerial interference and not the direction legitimately given by (former minister) Austin Gatt, and infinitely more dangerous.”
He pointed out that the NAO report analysed a period unrelated to the cases currently sub judice and the lack of minuting was not related to the cases of corruption. Changes to the procedures had been instituted in January 2011 and not when the NAO started the audit some seven months later.
Concluding, Mr Fenech said there was no government plan to buy oil from some particular source, particularly since the government had already started investing in the interconnector and was going to make a changeover to gas.
He said that the administrative procedures had been redressed by the end of 2011.
Answering questions by Justice Minister Owen Bonnici, he said risk was always clear and present and the direction given by the minister to lock prices at a given point was legitimate in the climate of the time.
He agreed with Dr Bonnici that over-dependence on oil was the real issue but the previous administration had been working in the direction of decreasing this dependence by going for an interconnector.