Updated | PN warns EU ‘ignoring anti-corruption sentiment’ after it approves power station deal

'Instead of understanding the Maltese public sentiment against corruption, the EU has made a decision that favours people with secret Panama companies

Konrad Mizzi with Electrogas CEO Franz Doefler and European energy commissioner Maros Sefkovic
Konrad Mizzi with Electrogas CEO Franz Doefler and European energy commissioner Maros Sefkovic

The Nationalist Party has taken the European Commission to task after it approved the government’s plan to purchase electricity from Electrogas, the private consortium behind the new LNG power station project. 

In a harsh statement, the PN warned that the European Commission’s decision “goes against the interest of European citizens” and as such will serve to erode public trust in EU institutions.

“We are disappointed that the European Commission ignored the clear facts and approved Joseph Muscat’s and Konrad Mizzi’s corrupt power station,” it said. “If the EU wants to regain public trust, it must first understand what its citizens are feeling. Instead of understanding the Maltese public sentiment against corruption, the EU has instead made a decision that favours people with have secret Panama companies [Mizzi].”

Addressing a press conference with minister Konrad Mizzi earlier today. European Energy Commissioner Maros Sefkovic announced that the security of supply agreement that will see Enemalta purchase electricity from Electrogas is in line with EU state aid.

Sefkovic hailed the project as one that will transform Malta’s energy landscape, lowering electricity prices for consumers while at the same time delivering cleaner energy.

However, the PN insisted that Malta doesn’t need a new power station because it already generates enough energy and that it could purchase cleaner and cheaper energy from the interconnector. Moreover, it argued that Mizzi and OPM chief of staff Keith Schembri had negotiated the power station deal and were later found to be owners of offshore Panama companies in which they planned to annually deposit up to €1 million in commissions.

“It is clear that the Maltese people weren’t expecting the European Commission to close its eyes and approve the project that will fill the pockets of a few people with commissions for 18 whole years.”

Separately, Nationalist MEP David Casa blasted the European Commission’s decision as “extremely disconcerting”.

“Konrad Mizzi, for all we know, still owns a Panama company. All the projects in which he has been involved are tainted with strong suspicions of corruption and money laundering,” he said. “That a member of the EU Commission would legitimise this man demonstrates a detachment from reality that is the Achilles heel of this European Commission.” 

Partit Demokratiku leader and independent MP Marlene Farrugia also weighed in on the debate, warning that the European Commission is undermining public faith in the European project.

“This decision is similar to how it had approved the extension of development zones in Malta by around six times the size of Siggiewi,” she said. “If Enemalta is paying Electrogas so that Electrogas is guaranteed a profit, and if our government is guaranteeing Electrogas’ debt, then why didn’t the government take ownership of the new power station in the first place, so that profits go back into the public purse?”

‘Sour grapes from Busuttil’ – Labour

The Labour Party dismissed the PN’s criticism as “sour grapes” from Opposition leader Simon Busuttil.

“Busuttil has attacked the European Commission because he doesn’t like the decision it has taken,” the PL said in a statement. “His reaction was one of anger, after having no more arguments left.

“It is clear that both the public, who will benefit from cheaper electricity bills and cleaner air, and the European Commission have faith in the project. Busuttil is now drowning in his own negativity and bitterness because he cannot stomach seeing Malta achieve success.”

Power station deal approved

In a statement published today, the European Commission said that under EU state aid rules it has no objection to the government’s plans to pay Electrogas Malta, operator of the Delimara plant, for providing energy to Maltese electricity company Enemalta.

“The measure compensates Electrogas for the additional cost of fulfilling public service obligations,” the statement said.

In June 2016, Malta notified plans to support the Delimara Gas and Power Energy Project to the Commission for assessment under EU state aid rules.

Pointing out that Electrogas has a public service obligation to make available electricity and gas to Enemalta, and supply electrical energy and gas when dispatched by Enemalta, the Commission said “the support takes the form of payments from Enemalta, which provide an economic advantage to Electrogas as they ensure a certain rate of return and a steady revenue stream.”

“The rate of return for Electrogas Malta is in line with that of similar projects. On this basis, the Commission concluded that the company will not be overcompensated for the services it will provide.”

The Commission also said that 2011 rules on services of general economic interest allow Member States, under certain conditions, to compensate companies that have been entrusted with public service obligations for the extra cost of providing these services.

The Commission verified in particular that the Maltese energy market cannot adequately deliver the necessary level of service due to its particularly small and isolated character.