Updated | ‘Consortium possesses ample financial resources’ – ElectroGas

De Marco: 'Govt must come clean on ElectroGas' • Video Ray Attard

Each member of the ElectroGas consortium “possesses ample financial resources to continue funding the development costs of the project”, ElectroGas said in a statement.

In 2013, Enemalta announced that it had selected ElectroGas Malta as the preferred bidder to build a new gas power station and supply electricity to the corporation.

The ElectroGas consortium made up of the German firm Siemens, SOCAR of Azerbaijan, the UK’s Gasol and GEM, a group of Maltese investors from the Gasan and Tumas business groups.

In a press conference, the Opposition called on the government to give answers to the multiple questions being raised on the construction of the new power plant in Delimara and the financial strength of the ElectroGas consortium.

The questions relate to a recent statement by Gasol, a 30% shareholder in the consortium, whose wary financial situation has led its own auditors to issue a clear warning to all those seeking to do business with it.

Following recent media reports in Malta and subsequent questions raised in Parliament over ElectroGas Malta’s ability to finance the LNG-to-power project for Delimara, the Project’s Sponsors broke their silence “to put the record straight and allay the misapprehensions that are being propagated in the media”.

ElectroGas Malta said each member of the consortium is dedicated to completing the development of the Project as quickly as possible and in accordance with all agreements and time schedules agreed with Enemalta.

“Each member of the consortium possesses ample financial resources to continue funding the development costs of the Project and their respective equity contributions needed to pay for the construction of the Project. This includes Gasol, which raised US$30m in the international bond market earlier this month,” ElectroGas said.

ElectroGas said the consortium continued to be supported by a group of high profile international banks, “who will provide the balance of the funds needed, on a project finance basis, for the construction of the Project”.

ElectroGas said the consortium was very much aware that the Delimara LNG-to-power project “is an important development that will bring relief to the Malta power sector, which suffers from high power prices and excess levels of pollutants”. 

“ElectroGas Malta and its backers share Enemalta’s vision for cleaner, lower cost electric power for Malta, and we intend to honour all of our commitments in Malta,” the consortium said.

According to Gasol’s own auditors, “the group does not currently hold sufficient cash or liquid assets in order to meet its commitments as they fall due for the next 12 months”.

Gasol’s auditors also warn that the “company is likely to be required to obtain significant capital in the future. There is no assurance that it will be able to raise such capital when it is required or that the terms associated with providing such capital will be satisfactory to the company”.

Addressing a press conference at the PN’s headquarter, deputy leader Mario De Marco said that a company that cannot meet its commitments was generally considered to be insolvent.

Flanked by Nationalist MP George Pullicino and PN local councillor Mark Anthony Sammut, De Marco said the government had to give answers to the questions being raised. “We are not here to level any accusations or allegations; but there are several questions that remain unanswered, questions that give rise to speculation,” De Marco said.

“The Opposition is not questioning Labour’s energy project. We recognise that it has the mandate to develop a new power plant. But we also expect the government to honour its transparency pledge and clarify the questions that are being raised.”

In 2013, Enemalta announced that it had selected ElectroGas Malta as the preferred bidder to build a new gas power station and supply electricity to the corporation.

A statement published by Gasol on the London Stock Exchange on May 14, 2014, stated: “As part of these arrangements, it is expected that Electrogas will enter into various agreements… for a consideration of €30 million in cash.

“The total cost to ElectroGas of developing the project over the next 24 months is expected to be around €370 million, which it is envisaged will be financed 80:20 in debt and equity respectively by ElectroGas.”

Pointing out that the €30 million cash consideration was never paid to the government or Enemalta, De Marco asked whether Gasol’s financial position was causing the delay in the construction of the new power plant.

“Were government adjudicators aware of Gasol’s wary financial position when the contract was awarded? Who was responsible for ensuring that all companies met the criteria in the adjudication process?”

De Marco added that the award of the contract had been under an expression of interest – and not under a request for tenders – fast-tracking the process.

“Is someone going to shoulder responsibility over this? What impact will Gasol’s financial situation have on the project? Is this the reason the €30 million cash consideration was never paid?”

Echoing de Marco’s comments, Pullicino argued that that investors “are not believing the project is feasible and sustainable…if they were, they would have invested their money with Gasol”.

De Marco said that the publication of all contracts related to Labour’s energy plan would also help in clarifying matters.

‘Simon has confidence in me’ – George Pullicino

In reply to questions by the press, George Pullicino said he enjoyed the trust of the party’s leader, Simon Busuttil.

On Sunday, Busuttil said he would be ready to take action against MPs found guilty of irregularities or shortcomings. According to Pullicino, Busuttil had faith in him because he was “an honest person and I always acted honestly”.

“There is no doubt that Busuttil trusts me because he is an honest person who believes in honesty. And I always acted honestly. Like [Busuttil] said, the Labour government resorts mudslinging to defend their shortcomings,” Pullicino said.

Referring to the now cancelled €35 million PV contract, Pullicino reiterated the Contracts Department was responsible of the contract.

He said, that despite having written to the Acting Police Commissioner confirming his availability for questioning, the police had not yet contacted him.

“The only thing I did was respond to a formality request and present the letter of intent,” Pullicino said, adding that he would have left the parliamentary group if he had acted incorrectly. “I wouldn’t want to cast a shadow on our parliamentary group.”

De Marco, in reply to questions, said he agreed that disciplinary actions had to be taken against those found to have committed irregularities. “But at no stage did [energy minister] Konrad Mizzi say that Pullicino influenced the process,” he added.