European Commission approves state aid for Delimara power plant
The European Commission yesterday announced it has approved, under EU state aid rules, Malta’s plans to pay Delimara power station operator Electrogas for providing energy to Enemalta.
The measure compensates Electrogas for the additional cost of fulfilling public service obligations, the EC said in a statement
In June 2016, Malta had notified plans to support the Delimara Gas and Power Energy Project to the Commission for assessment under EU state aid rules. The project comprises the development of a floating liquid natural gas storage unit and a new combined cycle gas fired power plant. The storage unit will supply gas to the new power plant as well as to an existing plant.
The project aims to decrease electricity prices, reduce environmental damage from energy production, and increase security of supply by diversifying the energy mix. The project will partly replace the existing electricity generation infrastructure in Malta, the EC observed.
The EC said in a statement, “The measure will benefit the project developer and operator, Electrogas Malta Limited. It was selected on the basis of a competitive tender procedure by Enemalta, a public company licensed to generate, distribute and supply electricity in Malta. Electrogas Malta has a public service obligation to make available electricity and gas to Enemalta, and supply electrical energy and gas when dispatched by Enemalta. This contract will last for eighteen years.
“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’s 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.
PN disappointed
In the wake of the announcement, the Nationalist Party expressed its disappointment with the EC for approving the “corrupt” power station of Prime Minister Joseph Muscat and Minister Konrad Mizzi.
In a statement, the PN said that this decision has dealt a blow to the trust placed in European institutions and that it goes against European citizens’ expectations.
The PN insisted that, “Malta does not need a new power station because enough electricity is currently being generated. Malta would have cleaner air if it purchased all its electricity from the interconnector rather than buying it from the gas power station. The price of electricity that Prime Minister Muscat, Dr Mizzi and OPM chief of staff Keith Schembri have committed themselves to paying for 18 years is double the price of electricity bought by the interconnector.
“The people who negotiated the new power station are Dr Mizzi and Mr Schembri, who have both been caught with secret companies in Panama, and who were found to have plans of receiving commissions amounting to USD1 million per year.”
The PN added that it is clear that the EU decided in favour of those with secret companies in Panama rather than trying to understand the local sentiment about corruption in Malta.
Konrad Mizzi has no shame - David Casa
PN MEP David Casa, in a similar vein, also lambasted Dr Mizzi after yesterday’s press conference, saying, “At a time when the European Union is increasingly perceived as being cut off from its citizens, this complete disregard for the anger of the Maltese people is extremely disconcerting,” the head of the PN delegation at the European Parliament said.
Mr Casa made these remarks following a press conference that was held by Konrad Mizzi - the minister revealed by the Panama Papers to have set up complex offshore structures typically used in cases of corruption and money laundering - and European Commission Vice-President Maroš Šefčovič.
Mr Casa added, “Konrad Mizzi, for all we know, still owns a Panamanian company. All the projects in which he has been involved are tainted with strong suspicions of corruption and money laundering. 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.”
Dr Mizzi, Mr Casa explained, gave instructions to open a company in Panama concealed within a New Zealand trust soon after taking office in 2013. He then attempted to open a bank account for the Panama company with no fewer than eight banks around the world, finally giving the go-ahead to open an account that would require deposits totalling $1 million over the course of a year while on a ministerial salary of €50,000.