Update 2 | 'Untrue that companies were willing to fund power station' – PN

The Prime Minister’s pre-electoral claim that private sector companies were willing to fund the ongoing LNG power station project in Delimara has been proven false, the Nationalist party said.

PN deputy leader Mario de Marco quoted finance minister Edward Scicluna who said in a recent interview that the private sector wouldn’t have invested in the power station if the government had not promised to purchase energy from it. 

“The ElectroGas consortium will not be shouldering any risks during the lifetime of the project, but will instead be reaping the profits,” De Marco told a press conference. “This no pain, only gain situation for ElectroGas runs counter to Joseph Muscat’s pre-electoral claims that the private sector were willing to fund the project.”

The government controversially announced earlier this month that it will be guaranteeing €360 million of a €450 million bank loan issued by four banks for ElectroGas to build the new power station.

Energy minister Konrad Mizzi has explained that the guarantee is a stop-gap solution until the European Commission issues clearance over the Security of Supply Agreement it had entered into with ElectroGas.

However, De Marco argued that this Security of Supply Agreement will effectively be a fresh state guarantee, an unprecedented move by a Maltese state to a private company.

When asked about a future PN government's plans for the energy sector, De Marco kept his cards close to his chest, arguing that the party cannot commit to energy plans as the government has imposed a "total information blocakge". He therefore called on the government to publish all the contracts it has signed with ElectroGas so as to assess the level of flexibility the government has to buy electricity on the market.

“We still don’t know how much energy the government will purchase from ElectroGas, at what rates, and for how long,” he said. “In proper democracies, governments publish contracts and scrutinize them in Parliament,” he said.

He claimed that the government only managed to reduce energy tariffs thanks to a sharp plummet in the market price of oil -by 75% since Muscat announced the 25% reduction in electricity tariffs -  along with a more efficient BWSC power plant and the launch of the interconnector.

However, when questioned as to whether he thinks that there is no need for the power station, De Marco said that the government has an electoral mandate to construct it and that “he won’t be the one to tell them not to”.  

Opposition MP Censu Galea said that Muscat has tied his political future to the power station project and that he now appears ready to do all it takes to complete it before the next election, at whatever cost.

“This is a clear example of power incumbency,” he said. “As Prime Minister though, Muscat’s main duty should be to protect the public, and not to save his own skin.” 
 

'PN making amateur mistakes in attempt to discredit government' - PL 

In a reaction, the Labour Party accused the Opposition of making amateur mistakes in their attempts to discredit the government’s plan in the energy sector.

In a statement, they said that the global market price of oil has only gone down by 35% between April 2013 and July 2015 – rather than the 73% quoted by the Opposition.

“Moreover, the Opposition has forgotten that Malta converts euros to dollars when buying oil, and that the euro has fallen significantly against the dollar since April 2013,” Labour said. “The PN talks about energy in such a negative manner because it is used to increasing electricity tariffs. Indeed, electricity shot up by 70% under the previous administration.”

Labour argued that electricity tariffs had increased under the previous administration, despite fluctuations in the global market price of oil.

“The global price of oil plummeted by 51% in the year preceding December 2008, but the PN administration still increased electricity and water tariffs, as well as petrol and diesel costs by some 20%.” 

‘Muscat has failed in mathematics’ – PN

The PN retorted that oil had cost $110 per barrel on the market when Muscat was elected Prime Minister, and that it has now plummeted to $40 dollars.

“Muscat hasn’t only failed in energy, but also in mathematics,” the PN quipped. “A secondary school student would have been able to calculate that the global price of oil plummeted by 75% and not 35%. Even if Muscat was telling the truth, which he isn’t, it would still mean that he is robbing from the families and businesses who aren’t benefitting from the reduction.”