Toxic energy politics

Konrad Mizzi is right in raising questions on transparency with regards to the €35 million photovoltaic contract awarded to Alberta-Solarig. But his concerns on this particular contract strengthens the case for full transparency on energy deals signed by the current government, which have more far reaching consequences on Malta’s energy sovereignty.

While the government questions the way the Contracts Department was sidelined in the Alberta contract, one should not forget that Shanghai Electric and ElectroGas were chosen to take over a significant part of Malta’s energy generation in the absence of full tendering procedures, with government having the final say in the choice of both.

As regards the choice of ElectroGas as Malta’s sole gas provider for the next 18 years, the contract was awarded through an Expression of Interest, which does not fall in the remit of the Contracts Department and Enemalta, which is owned by government. We were never given details showing that ElectroGas had presented a better bid than others. 

Surely as a result of the Labour’s energy blueprint, there will be no ‘oil scandal’ in the future. This is not just because cleaner gas will replace dirtier HFO. For the oil scandal itself resulted from the abuse of tendering procedures. Enemalta had to issue tenders for its oil supply and the process lent itself to attempts by multinational companies to influence the process in their favour.

Apart from the energy bought through the interconnector, energy will now be bought from one source; ElectroGas which will be provided with gas bought and traded in the international market by SOCAR Trading. The latter is owned by the government of Azerbaijan, which scores 28 out of 100 in Transparency International’s corruption perceptions index and is ranked in 128 place out of 177 countries surveyed. In many ways one Expression of Interest awarded last year will replace scores of competitive tenders.

As regards Shanghai Electric, the first impression given by the government was that of a strategic partnership which would inject much needed cash in the bankrupt Enemalta. One therefore understands why the company was directly chosen as a partner in a bid to rescue Enemalta from financial ruin. 

Yet subsequently it was announced that the Chinese company would also own 70% of BWSC, probably in return for converting the plant in to gas. Before the election the conversion of the plant was factored in Labour’s bold plan as an integral part of the energy deal with the new private company. That was not realistic. For ElectroGas never took upon themselves this responsibility. In the absence of the Chinese investors, the Delimara plant would still operate on Heavy Fuel Oil and Labour would have lost face with the people of Marsaxlokk. Without Chinese help the government would have not honoured its electoral promise to close down the “cancer factory”. This does not make Chinese investment a bad idea. It simply explains why the government has limited leverage, simply because it needs the Chinese more than they need him.

Moreover ownership of one of Malta’s two power stations has changed in the absence of any tendering procedure. Probably to make up for the cost of gas conversion the Chinese owners want to sell the energy they create to Enemalta. Probably they also want to sell a fixed amount. Probably the Chinese either want to sell their energy to the Maltese or export it (therefore raking in the profits themselves).

So far the government has not tabled any agreements signed with either company nor has it answered technical questions on what it intends to do with any surplus of energy which can be created by having three sources of energy; namely the state owned interconnector and the two privately owned power plants. I have personally sent six questions to Konrad Mizzi’s ministry which have never been answered.

Instead the government has pounced on a contract for the provision of photovoltaic energy signed by the previous government and awarded to Alberta. 

Surely even if the process was legal as it probably was, the €35 million contract does raise legitimate questions.

Clearly the feed-in tariff applied in this contract seemed too advantageous to Alberta. Letters published last week by the government suggest that the involvement of the contracts department and Malta Resources Authority was minimal. Moreover the investment seems to have been backed by an unsigned letter of a bank which had already changed ownership. The fact that the PN has chosen George Pullicino as its energy spokesperson has exposed it to criticism on his performance in government as the Minister responsible for Resources. 

Still, while former ministers have to answer for their acts in government, current ministers especially those elected on a promise of transparency are not expected to shift responsibility by themselves pouncing on an unrelated case.

In this case what is reproachable is not that the government is exposing the alleged scandal but the fact that it is using it divert attention from its failure to honour its main pre election pledge; that of completing the new infrastructure by March 2015, a pledge that was reiterated before MEP elections when this newspaper revealed that the contract with ElectroGas had yet not been signed.

In a similar way George Pullicino hits back at Konrad Mizzi for his wife’s job with Malta Enterprise. So we end up with the government diverting attention from its evaporating promises by diverting attention on a questionable but unrelated energy contract; and the former minister diverting attention from the Alberta contract by pouncing on the questionable but unrelated employment of Sai Mizzi. In the order of things, the most newsworthy item is definitely the lingering questions on Labour’s energy plans, followed by the Alberta deal, with Sai Mizzi’s nepotistic appointment trailing as an afterthought of yesterday’s news.

Surely any newly elected government would exploit the former government’s dark skeletons to dent trust in the Opposition, especially in a moment of great difficulty just as any opposition in the world would exploit the direct appointment of a minister’s wife by government. What Labour seems to be forgetting is that people can read through these tactics. The overdrive to divert attention from the uncertainties facing the energy sector simply exposes the panic in Labour’s ranks.

Moreover by resorting to attacking the Opposition’s record in government whenever it faces questions on its own record, the government is sending a toxic message: that democracy in Malta is doomed and that all promises made of greater transparency before the last general elections was one big joke.

We are becoming accustomed to having political parties demanding transparency when in opposition and restricting it when in government. This applies to both major parties. 

The ultimate price is being paid by Maltese democracy. At this rate the country is fertile ground for a bout of anti politics or for a hysterical Maltese version of Beppe Grillo or worse our own equivalent of the populist far right.

Surely this climate of disillusionment may give the government breathing space from the opposition’s attempts to nail it, but such an attitude will ultimately erode trust in the whole political system. 

As things stand Malta is faced with a situation where government can get away with murder simply because it can claim that it is doing the same as its predecessor. 

The message the electorate is receiving is that democracy is simply a choice between crooks. I do not subscribe to such a view, especially in view of Malta’s successful marriage of economic growth, democracy and social justice. Transparency will only strengthen our robust Maltese model of which we should be proud.

Moreover the Opposition’s poor record in office when it comes to transparency does not absolve government from submitting to full parliamentary scrutiny on vital contracts. 

One may say that parliamentary scrutiny was lacking in the past. But one can also say that parliamentary scrutiny has become even more vital in view of the fact that Malta is effectively privatizing a substantial part of its energy supply. No amount of technocratic arrogance disguised as wisdom can replace the need for full parliamentary scrutiny.