The Nationalist Party yesterday called on the government to publish all documentation relevant to the recent €88 million state guarantee granted to the builders of the gas power station, Electrogas Malta Ltd.
If the government had nothing to hide on this unprecedented deal it should explain a number of issues, PN deputy leader Mario de Marco said at a news conference.
Why did the government feel the need to issue this unique guarantee to a private company? he asked.
Did the government, by its action, put at a disadvantage other private entities who had wanted to bid for the power station contract but did not have the necessary finances to do so?
Did the government have a Plan B in case anything went wrong?
The Sunday Times of Malta recently revealed that the government had issued an €88 million state guarantee to cover the exposure of Bank of Valletta in a €101 million bridge loan to Electrogas.
What will happen if the EU does not give its go-ahead on the agreement between Enemalta and Electrogas?
The private consortium will be supplying Enemalta with electricity and gas for 18 years after winning the bid to build the gas-fired power plant.
Until the state guarantee was issued, however, no physical works had started on the plant and it was announced that the project would be delayed by 18 months.
The government has admitted that the state guarantee is unique but insists it is a temporary measure until a security-of-supply agreement between Enemalta and Electrogas is approved by the European Union.
“What will happen if the EU does not give its go-ahead?” Dr de Marco asked yesterday, hoping this would not be the case. “If we needed to ask for the EU’s consent, it risks not being given. Will we then stop the project? Will taxpayers have to fork out more money?”
Shadow Minister Claudio Grech said the Enemalta-Electrogas agreement, signed more than a year ago, needed to be published.
He also suggested that the state guarantee may discriminate against local businessmen. “It is unheard off in the financial world that the government guarantees a private loan.”
The government has refused to publish the letter granting the guarantee, even though Finance Minister Edward Scicluna said he had no difficulty in doing so.
The independent State Aid Monitoring Board, which has declared the guarantee does not amount to state aid under EU rules, is refusing to say how it reached this conclusion, citing secrecy and confidentiality.
The European Commission says the issue is under scrutiny and it is still analysing whether the deal amounts to some form of state aid.
Last night the government reiterated that all parties had agreed to the temporary bridge financing, a solution in the national interest.
Electrogas shareholders pledged their equity and issued letters of credit as a form of guarantee to the banks, it said.