'Electrogas guarantee casts doubt over BOV leadership' - PN

The Nationalist Party has warned that a state guarantee recently granted to Bank of Valletta to cover a loan to the Electrogas consortium, warning has cast a bad light on the bank's leadership and sowed seeds of doubt amongst its shareholders. 

Shadow economy minister Claudio Grech quoted energy minister Konrad Mizzi as having said that four banks had refused to grant Electrogas a loan before the European Commission cleared the Security of Supply Agreement it had entered into with the consortium constructing a new gas power station.

Grech suggested that the government didn’t wait for the clearance before guaranteeing €88 million to the bank because it didn’t want to fall further behind on the construction of the power station, the project that it has “bound its political future to”.

“No matter how remote the possibility is, if the European Commission doesn’t green-light the Agreement and deems it to constitute state aid, then somebody will have to make good for that loan,” he said, claiming that the brunt could fall on the bank's shareholders. 

The most recent financial statement of Gasol, which owns a 30% stake in Electrogas, reported a negative equity of €12.8 million and accumulated losses of €96 million, with independent auditors warning that the company doesn’t hold enough cash or liquid assets to meet its commitments.   

Shadow finance minister Mario de Marco questioned whether any due diligence had been carried out on Gasol prior to the acceptance of Electrogas as the preferred bidder for the power station’s construction.

“Although the government is the largest shareholder in BOV and enjoys the right to appoint the bank’s chairman, the bank’s main loyalty should be to its shareholders,” he said. “BOV is a pillar of Malta’s economy and excess government interference will harm its credibility.” 

Shadow energy minister Marthese Portelli called on the government to publish all the contracts signed between Enemalta and Electrogas, as well as Enemalta’s annual reports and financial statements for 2012, 2013, and 2014.

She flagged Konrad Mizzi’s recent statement that he cannot publish the Electrogas contract as it is “commercially sensitive” and that the government is no longer the sole shareholder of Enemalta.

“Does the publication of the Electrogas contract depend on Shanghai Electric?” Portelli questioned, referring to the Chinese state-owned company that owns 33% of shares in Enemalta. “Mizzi had insisted several times that the government has maintained absolute control over Enemalta since its partial privitisation. The energy sector is shrouded in mystery and secrecy.”