ElectroGas fines in excess of €10 million

Enemalta sources confirm that the consortium which will be selling gas and power supply to Enemalta is facing delay fines in excess of €10 million

De facto energy minister Konrad Mizzi with Electrogas CEO Franz Doefler and EU Commissioner Maros Sefkovic
De facto energy minister Konrad Mizzi with Electrogas CEO Franz Doefler and EU Commissioner Maros Sefkovic

Enemalta will be raking in over €10 million in fines for delays by the ElectroGas consortium in delivering the gas-fired power plant on time.

Informed sources at Enemalta told MaltaToday that the fines have been piling up since October 2016, when the LNG tanker MV Armada Mediterrana arrived in Malta.

The completion of the 200MW power station at Delimara was originally envisaged by March 2015 and a second deadline was missed following a delay in the conversion of the LNG tanker.

The government this week published redacted agreements signed between Enemalta and ElectroGas, blacking out crucial information such as penalties and power purchase rates.

During a briefing on Tuesday ahead of the publication of the contracts, Enemalta officials refused to state how much ElectroGas would be paying in delay fines, arguing that this was commercially-sensitive information.

Informed sources have said that the damages are tied to ElectroGas’s failure to the achieve “the open cycle acceptance date of a gas turbine generator by the scheduled open cycle energy delivery date”.

ElectroGas also failed to achieve the “energy delivery date” by the scheduled date.

“ElectroGas have been incurring daily penalties since October,” the sources said, insisting that the amount was “unprecedented” in government contracts.

The new power station, a key plank of Labour's electoral campaign, will use liquefied natural gas (LNG) storage, re-gasification and a natural gas supply infrastructure and a combined-cycle gas turbine (CCGT) electricity generating plant.

In January, the European Commission confirmed the legality of the 18-year ElectroGas deal, concluding that ElectroGas will not be overcompensated for the services it will provide.