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PN leader reiterates vow to renegotiate energy contracts when in government

In a six-hour debate on a motion presented by the opposition, the House of Representatives discussed the Enemalta contracts signed with ElectroGas Malta and Shanghai Electric

Paul Cocks
16 February 2017, 9:30am
Last updated on 16 February 2017, 3:13pm
Simon Busuttil said energy contracts, as published, were completely useless
Simon Busuttil said energy contracts, as published, were completely useless
A new PN government will investigate all contracts negotiated or signed by former Energy Minister Konrad Mizzi and the Prime Minister’s chief od staff Keith Schembri, because the opposition had suspicions about the two official’s dealings, opposition leader Simon Busuttil said on Thursday.

“We will renegotiate the contracts with Electrogas for the operation of the new power plant in Delimara and the supply of electricity to Enemalta, and we will immediately remove the LNG tanker from Marsaxlokk bay,” he said. “I can also reiterate our vow to purchase energy from the most advantageous source, irrespective of any contracts signed by this government.”

Busuttil, who was speaking in Parliament in a debate on an opposition’s motion on the government’s contracts with Electrogas and Shanghai Electric, said that the development of the LNG power plant in Delimara was a symbol of the government’s blatant lies and deceit.

“Four years after the election, and two years after the power station was supposed to have started operating, the government is still denying that the reduction in electricity bills was not made possible because of anything this administration had done,” he said.

Busuttil said that the energy tariffs could be reduced because of the international price of oil, which had dropped by 66% in the past five years.

“Tariffs dropped also because of the new BWSC plant that the previous administration built and started operating in 2012 and because of the huge savings made possible by the installation of the interconnector, another project launched by the previous government.”

Busuttil said that the copies of the contracts published by the government in the past two days were entirely useless as all the pertinent data and details had been blacked out.

“Who does the government think it is kidding? This government should start showing some decency and honesty in its dealings,” he said.

Busuttil said that the government’s duplicity was made obvious recently, when interruption to the interconnector supply had caused widespread power cuts for hours.

“The advantages of the interconnector are evident even to this government, which is making as much use of this supply as possible, so much so that no other power plant had been operating when the interconnector supply was cut off because of storm damage in Sicily,” he said.

The opposition leader said this government was turning a blind eye to those friends of theirs with Panama accounts, but was instead coming down hard on individuals and small businesses.

Busuttil said the opposition could not help but claim corruption in government ranks after even the auditor general pointed out the government had lost €14 million in negotiations in Azerbaijan, where only the prime minister Joseph Muscat, Konrad Mizzi, chief of staff Keith Schembri and communications coordinator Kurt Farrugia had visited.

He called on Muscat to disclose the owner of e.grant, the third company registered in secret in Panama together with those of Schembri and Mizzi, if he indeed was not the owner himself.

Konrad Mizzi, minister without portfolio within the Office of the Prime Minister, said the government was committed to collecting the €10 million in delay fines from Electrogas, contrary to what the previous government used to do.

He said Electrogas had paid an €18 million performance guarantee and had also fully paid the €30 million it had committed towards a development fund.

Mizzi said that the contract with Electrogas was an ironclad agreement that covered all bases and that the opposition too had confirmed this, as it had failed to criticise even one single clause contained in the contract.

He said the government had delivered on its promise to lower electricity bills for households and businesses.

“This government was also committed to promoting renewable energy,” Mizzi said. “We have managed to push Enemalta to new boundaries, switching our focus to clean gas.”

He said this government had taken the gas pipeline seriously, contrary to the previous government, and would be establishing a route for the pipeline by the summer.

Shadow energy spokesperson Marthese Portelli noted that the government had blacked out all the relevant data that the opposition, and the public, had been clamouring for.

“Did the prime minister and his minister, who had a secret account in Panama, negotiate the contracts on behalf of the public, or in the interests of others?” she asked.

Portelli asked who the blacked-out areas were protecting, since it was obvious they were not advantageous for the Maltese public.

“Who is the minister with an account in Panama now protecting in these contracts?” she said. “Let us not forget that this minister, who negotiated the deal with Electrogas, also led the negotiations with Shanghai Electric.”

Portelli asked former Energy Minister Konrad Mizzi to explain his relation and contacts with businessman Zhang, with whom the government negotiated for the wind-farm project in Bosnia Herzegovina.

Nationalist MP Ryan Callus called on the government to confirm if it was true that the contracts stipulated that Shanghai Electric would receive €500 per turbine for each hour the eight turbines of the BWSC plant remain in standby, with a possible fallout of €96,000 a day.

Shadow Finance Minister Mario De Marco said the government should also confirm whether it would still be able to choose where to purchase the supply of electricity from, or if – in its contract with ElectroGas – it had bound itself to limit purchasing energy through the interconnector, even if much cheaper than the energy supply that could be bought from ElectroGas.

He noted that the censored copies of the contracts with ElectroGas – published by the government earlier this week – had the most pertinent information blacked out, providing no answers to the many questions raised by the opposition and other interested parties.

“Has the  government lost the flexibility in energy purchasing that the previous administration had managed to set in place and practise?”

“How can we know what tariff the government bound itself to buy energy from ElectroGas from? How much energy did the government commit itself to buying from ElectroGas? And can anyone tell us for how long the government bound itself to ElectroGas for?”

“Where is the security of supply agreement? Where is the expression of interest published originally?” he asked.

Recent reports in the media had revealed that Shanghai Electric was making tens of thousands of Euros in profit every day from the BWSC plant that the government gave to the company and that was still utilising heavy fuel oil, even though the government had promised to switch it to operate on gas.

De Marco insisted it was unacceptable that the energy tariffs and the electricity tariffs were blacked out and completely stricken out from the copy of the contract with ElectroGas as published by the government.

“This is not the government’s or the ministers’ money at stake here, but public money,” he said. “The government should hold itself accountable when spending public money and should provide a clear and detailed accounting of expenditure.”

Consumers benefiting from contracts

Tourism Minister Edward Zammit Lewis said the consumer was the biggest winner – following the agreements between the government and ElectroGas and Shanghai Electric – since electricity tariffs had been reduced considerably in the past few years.

“Consumers have also benefited from the introduction of cleaner and healthier energy production as opposed to the use of and dependency on heavy fuel oil, as introduced by the previous Nationalist government,” he said.

Zammit Lewis said that, although the opposition complained that it had filed this motion in June 2015, minister Joe Mizzi was on record as far back as March 2014 as stating that the contracts would be published in due course.

“The opposition, while in government, also failed to publish a number of important contracts, such as those with Liquigas and Malta International Airport,” he said. “And if they had published the contract with Maltco, they would have faced huge penalties.”

Zammit Lewis pointed out that the previous PN government had refused to give details on the contract for the provision of staff uniforms at MIA, citing commercial sensitivity.

“They should therefore not be surprised that this government chose not to publish much more sensitive information contained in these contracts,” he said.

Labour MP Anthony Agius Decelis said that Malta could be proud to have the third-lowest energy tariffs in Europe, helping to provide a better quality of life for all Maltese families.

“As people understand just how much the government had achieved in these four years, more will join this movement, knowing it is the best choice for the well-being of their families,” he said.

Comparing tariffs

Opposition economy spokesman Claudio Grech criticised the government for not only not publishing details on the bids submitted in response to the Request for Proposals and also for failing to publish the due diligence studies carried out once the preferred bidder was identified.

Grech said the debt in the development was not guaranteed by the private investor but by public funds.

“Was this already established and communicated to bidders in the RFP?” he asked. “And has the €30 million subsidised by the government to ensure a reduction in energy tariffs been increased, considering the project is now in its fourth year as opposed to the two-year completion deadline originally established?”

Grech insisted the public needed to know what supply tariff was agreed to in the contract with ElectroGas, so as to be able to compare this with the current tariff paid for supply generated through the interconnector.

“Cut the crap”

Opposition MP Edwin Vassallo called on the government to “cut the crap” and publish the data it had chosen to censor in the published copies of the contracts, since the government’s decision to withhold critical data was leading many to suspect further corruption was involved.

He said that the amount of data that had been retracted and blacked out in the published copies of the contracts raised more doubts and suspicion in the government’s motives for keeping this information hidden.

Vassallo said that the government was trying to use recent power cuts and suspension of the interconnector supply to justify the development of a new power plant.

Environment Minister Jose Herrera said the project was backed by all interested parties, including the Environment Resources Authority and eNGOs, except for the opposition, which seemed to persist in preferring heavy fuel oil use.

“The opposition does not want to accept that this project will mean a 90% decrease in dust particles in the air, and a 50% decrease in greenhouse emissions,” he said.

Finance Minister Edward Scicluna said he could not understand the opposition’s insistence on defending the use of heavy fuel oil.

“Let us not forget that under the Nationalist government, families were subject to the highest energy bills, whereas this administration had seen to bring tariffs down for households and business,” he said.

Scicluna said that the government’s policies had resulted in Enemalta becoming profitable once again – a comment that made the leader of the Democratic Party Marlene Farrugia seek further clarification from the minister.

Scicluna said further information would be provided in other occasions.

“Muscat overshadowed Machiavelli”

PN MP Ryan Callus said that it was obvious Prime Minister Joseph Muscat did not respect the opposition and was not honest when he extended a hand of friendship and cooperation.

“The prime minister knew how much this motion had hurt his government, particularly because of the possible links with the Panama scandal,” he said. “Machiavelli’s instructions on how to maintain power at all costs had been overshadowed by the machinations of this prime minister.”

Callus said Muscat had sought to nullify the opposition’s motion by publishing, at the thirteenth hour, the heavily-censored contracts that provided no pertinent data whatsoever.

Labour MP Silvio Parnis said the opposition could not stand the fact that this government had managed to bring the country’s economy back on a sure footing and to provide a better quality of life for all Maltese.

Economy Minister Chris Cardona thanked the opposition for presenting the motion in parliament as it provided government MPs a chance to speak about the huge successes registered by this administration in the energy sector.

Cardona said that the government’s decision two years ago to lower electricity tariffs for businesses and industries like manufacturing, had led to private savings o around €80 million in two years.

“And for the most part, the companies chose to reinvest the money they saved through the lower electricity bills,” he said.

Marlene Farrugia, of the Democratic Party, said electricity bills had been cut because the international price of oil had dropped by two-thirds in value over the past eight years, and because the interconnector was now fully functional and providing the bulk of the local energy supply.

As to the government’s claims that the opposition too – while in government – had failed to publish contracts with MIA, Maltco and Liquigas, Farrugia said the government had full access to those same agreements and could ascertain whether anything irregular was included.

Education minister Evarist Bartolo said that the issue of energy provision – though critical in itself – was also important because, through the government’s policies in this industry in the past four years, it had helped to improve the standard of living of all Maltese.

The huge savings in the energy sector, particularly in curbing the corruption that was the practice in the past, had made it possible for the government to reduce the national debt and deficit and had also provided funds for further investment in many other areas, including education.

Opposition accuses government of not acting in public interest

Shadow energy spokesperson Marthese Portelli noted that the government had blacked out all the relevant data that the opposition, and the public, had been clamouring for.

“Did the prime minister and his minister, who had a secret account in Panama, negotiate the contracts on behalf of the public, or in the interests of others?” she asked.

Portelli asked who the blacked-out areas were protecting, since it was obvious they were not advantageous for the Maltese public.

“Who is the minister with an account in Panama now protecting in these contracts?” she said. “Let us not forget that this minister, who negotiated the deal with Electrogas, also led the negotiations with Shanghai Electric.”

Portelli asked former Energy Minister Konrad Mizzi to explain his relation and contacts with businessman Zhang, with whom the government negotiated for the wind-farm project in Bosnia Herzegovina.

Paul Cocks joined MaltaToday after having spent years working in newspapers with The Times...
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