Enemalta Act approved, opposition votes against because of lack of information

The Enemalta Act was today approved following a week-long parliamentary debate with energy minister Konrad Mizzi saying that a number of strategic investments in Europe would be announced in the coming weeks.

The Enemalta Act 2014 will transform the state’s energy corporation into a public limited company, transferring all the assets, rights, liabilities and obligations of the Corporation.

Earlier, PN deputy leader Mario de Marco said that although government might have the best intentions in the energy sector, the opposition could not sanction the partial privatisation of Enemalta unless all relevant documents are published.

“If there are any certainties on the partial privatisation of Enemalta, these are the lack of transparency and the fact that the deal was concluded in the dark. The opposition cannot vote in favour unless these questions are answered and light is shed on these doubts.”

De Marco called on government to come clear on how the Chinese company with which it struck an agreement was selected and whether other options were taken into consideration.

“We are not simply debating the act transferring Enemalta’s assets to a new company, but we’re in fact discussing the privatisation of Enemalta, although government insists it is not a privatisation,” he said.

While insisting that the opposition had a duty to criticise, de Marco said that over the past decades the generation of electricity in Malta has come a long way, “however there is room for improvement, and our job as an opposition is to scrutinise the government’s plans in the sector.”

He added that government’s plans were not necessarily the best and called on government to accept the “genuine” criticism on a technical subject, which did not deserve to be turned into a “political football.”

Turning to the Chinese investment at Enemalta, he asked “why this haste in selling part of Enemalta? What is the company’s value?” adding that these questions could not yet be answered unless government published the agreements and contracts signed with the Chinese state-owned government.

“We are here in the country’s highest institution, and we are expected to vote on government’s plans without knowing what kind of agreement was signed by government. This is not right.”

He said that the opposition was not voting against the act because it opposed privatisation, however de Marco said that government had not learnt anything from past mistakes committed by previous administrations in previous privatisation processes. 

“Since we have no documents to look at, I do not exclude that the deal with the Chinese company is beneficial, however we cannot form an opinion before having all documents at hand,” de Marco said.

The fact that the Chinese government owns the company buying a substantial stake in Enemalta raised further concerns, de Marco said, asking who would be the shareholders and who will be in control of the new companies being created.

De Marco said the interconnector played a central role in the future generation of electricity in Malta, adding “it’s a pity that the government opted to go for a new power plant rather than make better use of the interconnector.”

Financial sustainability, de Marco said, was Enemalta’s “biggest challenge.” The former PN minister said that while the corporation could have been managed better in the past, the company’s debt was also the result of important investments which benefitted the country.

“Does Engineering Resources Limited have enough capital to guarantee the jobs of all Enemalta workers in the long run?” he asked, adding that it was “unacceptable” to vote on the act without having further details on the new companies.

On the plans to give the new company legal immunity in deciding how and when electricity can be provided, especially to private companies, de Marco said “this is not a consumer driven proposal, but its an operator driven proposal. Government must decide on whose side it is, are you with the consumers or with the operator? If you’re with the customers this proposal must be removed.”

Opposition MP Claudio Grech posed a number of questions on how the Chinese company would be investing money or whether the €300 million cash injection was a simple purchase of the BWSC power plant which Labour dubbed “a cancer factory.”

While saying that he had no doubts on the government’s intentions, Grech said the “method is wrong.”

Insisting that the deal to privatise Enemalta was sensitive, given the country’s dependency on a sole source of energy generation, he said we are not selling a bank or a telecoms company, this is a company, which we only have one of and we cannot replace. That is why we cannot approve of the method.”

Minister announces strategic investments

Energy minister Konrad Mizzi today said that Enemalta has a long-term plan which was already bearing positive results and reassured that the company would seek the best strategy for the benefit of the state-utility’s employees. 

He said that a number of strategic investments in Europe would be announced in the coming weeks, explaining that these agreements would offer new opportunities to Enemalta.

Mizzi also reassured that the government’s strategy in the sector would guarantee operational improvements, a reduction in the costs in energy generation while improving efficiency and ensure that Enemalta remains in control of the dispatch and distribution of energy.

In his winding-down speech on the Enemalta Act, the minister explained that Shanghai Electric’s investment would cut Enemalta’s debts by half, adding that the Chinese company’s 33% shareholding would also lead to an “drastic” improvement in the emissions level.

“Enemalta can be a medium-sized European player,” Mizzi said, explaining that the company would be announcing a number of strategic investments in Europe in the coming weeks.

Describing the company’s employees as “one of its biggest assets,” Mizzi reiterated that the new company which will employ Enemalta workers “will be 100% be government” and all current conditions will be honoured.