Transparency in contracts: How governments compare

While the BWSC agreement dealt with the construction of a new power plant which remained under Enemalta’s full ownership, the agreement with Shanghai Electric Power deals with four different things.

These include: a Chinese minority (30%) shareholding in Enemalta, a Chinese majority shareholding (70%) in the BWSC plant, a power purchase agreement between Enemalta and the Chinese owned BWSC plant and the creation of a new joint company in the renewable energy field.

Moreover while the former was an agreement signed with a private company the latter was signed with a company owned by another nation state.

The lean 15-page agreement with Shanghai Electric Power simply refers to the shareholding of the new companies created in the energy sector but does not include the crucial power purchase agreement regulating the sale of energy from the privatised BWSC plant to Enemalta. 

The agreement does oblige the Chinese state owned company to convert the BWSC plant to gas but includes no timeframes or penalties if these are not met.

But unlike the PN government the PL government did not have to seek a waiver of confidentiality to publish the agreement.

A clause in the agreement states that “The parties consent to the government of Malta presenting this agreement to the Maltese parliament should it consider this to be necessary”. 

But the agreement not only refers to ‘ancillary agreements’ which are not published it does not include any clause regulating the resolution of conflicts between the two companies.  Moreover the agreement refers to other “commercial agreements” that will take precedence over it.

In contrast the 2,000 page BWSC contract, made up of documents in 11 volumes, was tabled in parliament in May 2010 before a parliamentary debate on the controversial power station contract but only after the company waived a confidentiality clause. 

Back then Muscat criticized Prime Minister Gonzi for “humiliating himself” when he asked for BWSC’s permission to publish the agreement reached on the new plant and then having to wait a week before he was granted permission to publish only parts of this contract.

The debate followed a report by the Auditor General who had full access to the report in which he found no hard evidence of corruption but noted serious administrative shortcomings. 

Significantly the public was informed which items were being withheld from publication. For before the agreement was published BWSC listed 11 items which, it insisted, should remain confidential and which could not be published.

These included information on the diesel engine and the generator and 132kV GIS switchgear designed by Siemens. The reason cited for this was the “confidential and proprietary information” belonging to BWSC’s suppliers. 

It also asked for letters from banks, including the European Investment Bank, diesel engine manufacturers and a list of sub-suppliers and sub-contractors not to be made available along with all the information about Wärtsilä, a leading diesel engine manufacturer, and a letter it sent to Enemalta in 2008.

It insisted that only one hard copy could be tabled in the House of Representatives and that no further hard copies or soft copies were handed out to third parties.

How agreements in other sectors were published:

The present government has not published its power purchase agreement with ElectroGas Limited. This means that the two agreements regulating the sale of energy to Enemalta remain shrouded in mystery.

Neither has the government published its agreement with Henley & Partners, the main concessionaires for Malta’s sale of citizenship programme and its agreement with Spanish transport company Autobuses de Leon. 

Under the previous administration the 128 page contract with Arriva was tabled in October 2011, eleven months after it was signed.  A few commercially sensitive items were  omitted from the published documents.  

In 2010 then opposition leader Joseph Muscat criticised the Nationalist government for excluding crucial information about Palumbo Spa from the due diligence report it had presented to parliament alongside the agreement.

Muscat claimed that the report excluded the memorandum and articles of association of the Italian company, reference to its background and standing and also the submissions made by the company itself.

In February 2007 former Investment Minister Austin Gatt tabled the voluminous draft agreement reached between the government and Tecom Investments on the development of the SmartCity project as well as the memorandum of understanding and articles of association of SmartCity (Malta) Ltd, a joint venture in which the government owns a nine per cent stake.  A master plan regulating land use on the site was also published.

The agreement between the government and Tecom on the privatisation of Maltacom was tabled in parliament by Austin Gatt in October 2006.