Letter of intent issued three months before MRA approved feed-in tariff

Letter of Intent ‘intended to create a legally binding contract’ between government and Alberta Photovoltaic Consortium

File photo.
File photo.

Three months after Alberta Photovoltaic Consortium were presented with a Letter of Intent by the Ministry for Resources and Rural Affairs (MRRA), the Malta Resources Authority (MRA) approved the feed-in tariff for the electricity produced from PV systems installed on government buildings.

The letter of intent was issued on 5 September 2012 whereas the letter confirming the MRA’s approval was issued on 5 December 2012.

According to the letter of intent signed by the then permanent secretary at the MRRA, Christopher Ciantar, the letter was “intended to create a legally binding contract between the two parties”.

The Labour government has decided against signing the contract with the Solarig-Alberta consortium, which is now under Police investigation.

Energy Minister Konrad Mizzi revealed administrative shortcomings during a heated parliamentary debate on Monday evening. Within minutes, the government went on to publish a bank document which did not bear the necessary signature. The bank guarantee is now being alleged to be the subject of a potential fraud.

READ MORE Alberta-Solarig directors mum over government suggestions of fraud in PV contract

The allegations centre around a banking document from the defunct Bancaja Bank, which should have certified the capital solidity of Spanish photovoltaic manufacturers Solarig, and suitability for a €35 million contract to cover government buildings in solar panels and sell the energy to government at preferential feed-in tariffs.

Mizzi also flagged the award of the contract for the rate of €0.2295 per kWh, excluding VAT, when market prices would have placed the rate at 16c.

The MRA letter states that “taking into consideration the fact that the feed-in tariff in question is the result of a competitive tendering process, the board of the Malta Resources Authority has approved the feed-in tariff in accordance with the terms and conditions of tender CT 2180/2011 during Board Meeting No.154 held on 21 November 2012.”

On his part, former resources minister George Pullicino denied his involvement in any administrative shortcomings, saying that he did not set the feed-in tariff and that the process had been the responsibility of the Contracts Department, the Malta Resources Authority and the Ministry for Finance. This statement has been repeatedly declared by Pullicino, including on Monday's edition of Reporter on TVM.

READ MORE George Pullicino on PV contract: ‘I have nothing to hide’

Pullicino also justified the higher 23c rate as including a number of obligations. The Nationalist Opposition has accused government of using this information as an attempt to deviate attention from the delayed construction of the power station.