Simon Busuttil tears up Electrogas contracts in Parliament

Yesterday’s fiery Parliamentary debate over a PN motion relating to government contracts related to the Delimara power station saw both sides take quite an aggressive stance, with Opposition leader Simon Busuttil, who was the last to speak, tearing up the contracts because the redacted parts were the most important, while members from the government hit out at past PN government deals.

Towards the end of the debate, no portfolio minister Konrad Mizzi said that the fines accumulated by Electrogas for delays have thus far surpassed €10 million.

Prime Minister Joseph Muscat hit out at the PN over the contract that had been signed for the privatisation of the Malta International Airport. “We would have liked to discuss the Malta International Airport contract. But the contract includes a clause that prohibits its publication,” he said.

Prime Minister Muscat said the PN was criticising the government for publishing redacted comments. “We are publishing all major contracts. This is unprecedented for Malta.”

There are many restrictions on the gas cylinder sector privatisation. Practically nothing from that contract can be published. There is also the Maltco concession contract, which will have to remain secret even if the company decides to give up the concession.

Dr Muscat said the government’s energy business model is clear. “We managed to anticipate the savings and reduce tariffs before the power station was completed. The Opposition says that the reductions were possible without a new power station. So why did they not reduce energy bills themselves when they were in power?”

He warned Opposition leader Simon Busuttil over the Egrant claims. “If you are going to imply that I have a company in Panama you better come up with proof to substantiate your claims.”

Dr Muscat said it was unacceptable for the PN Leader to lie in an attempt to tarnish his (the PM’s) reputation. “I will not allow you to do that.”

Independent MP Marlene Farrugia said the government was elected by the people so the people should be told what the government was negotiating. “If this was a good deal then the government should have nothing to worry about.”

But people were asking questions about the power station which was supposed to have been built within two years. “People want to know whether they have been taken for a ride by this government which sold our power station and issued guarantees for a private company,” Dr Farrugia said.

The PM said the PN could have reduced energy tariffs, she added. “Do you think people out there are idiots? The tariff reductions were possible mainly because of the drop in the price of oil, the efficiency of the BWSC plant, which you said was a cancer factory, and the interconnector.”

This was not the result of some supposed two-year project which has bound Enemalta to buy energy at higher prices for 18 years. Dr Farrugia also said there was nothing in the contracts to say that Electrogas should offer cheaper prices in case of higherthan-expected profits.

Justice Minister and Opposition leader go head to head over yesterday morning’s court case

Justice Minister Owen Bonnici spoke of a motion presented by the PL when in Opposition, for energy tariffs to be cut. “Today, things have changed, and we don’t have an Opposition filing motions to reduce energy tariffs, as they have already been reduced, but rather questions regarding the operation of the energy sector.”

“I remember a time when the then Prime Minister said he would vote from his heart to keep tariffs high, when the then Finance Minister would say that people needed to get used to high energy tariffs.”

He said the EU Commission read the contracts, and questioned whether the PN was also questioning the European Commission.

Dr Bonnici said that the Opposition leader was in the court room that morning over a libel case instituted by OPM Chief of Staff Keith Schembri. “Keith Schembri’s lawyer asked Dr Busuttil to take the witness stand, yet Dr Busuttil said he did not know what he said that made Mr Schembri feel defamed. You call him corrupt out of court, and then use legalisms in court.”

At this point, PN Whip David Agius called a point of order, and said that the minister was lying. Opposition leader Simon Busuttil also said that the minister was lying, and explained that the libel case of Keith Schembri against him began being heard earlier yesterday. “Keith Schembri asked me to testify, with him never saying what he felt defamed by. That is the truth of the facts. I told the courts: ‘how can I defend myself without knowing what I am accused of?’ The Constitution grants everyone a right to a fair trial, and the courts did not accept Mr Schembri’s request. If someone is accused of something, then he has the right to know what he is accused of. For the minister to try and lie about something so basic is extreme.”

Dr Bonnici said that for Dr Busuttil “to come here calling everyone corrupt, then appear in court and use legal procedure not to testify is something that shows how low he can go. You had a chance to prove your claims before the courts, yet this shows that you run instead of facing the truth.

In response, Dr Busuttil said that the Court said that Mr Schembri cannot expect the Opposition leader to testify without presenting the speech that he felt defamed by. Dr Busuttil said it is a black day when the Justice Minister speaks like this about a right safeguarded by the Constitution.

Minister Konrad Mizzi said that the amount Electrogas will need to pay for delays is more than €10 million. As has been happening, the Opposition moved out of the House when Dr Mizzi began his speech.

Minister Mizzi spoke about the bidding process for the contract which had occurred. “There were 18 bidders originally, and eventually Electrogas was chosen. Electrogas is formed by Siemens Project Venture, GEM and SOCAR.”

He proceeded to describe the project, and said that it won a IJ award as well. Turning to the Shanghai Electric power deal, he said their investment saved Enemalta and halved Enemalta’s debt.

“A set of the contracts were signed with Electrogas, another set by Shanghai Electric Power, which included the sale of the BWSC plant, an energy contract etc.

“We also introduced the security of supply agreement and all tenderers knew about it. We notified the EU Commission and sent them the whole set of contracts. For the project to keep going until the EU checked the contracts line by line, we as government gave a temporary guarantee to Electrogas (up to 80%). To protect the public, if the Commission did not approve the project, then government would be able to take over the project. After its scrutiny, the EC approved all the contracts tied with Malta Power and Gas. The EC also said that the process which led to choosing Electrogas was fair.”

“Where is the corruption? There isn’t any. The EC said the contracts were fair and transparent. The EC also approved the state aid aspects, and also concluded that the price Enemalta pays Electrogas for gas is reasonable and has a fair return. The EC also said that this is a needed project to close down the Marsa station and the Delimara 1. Without this project, we would have needed the fuel oil infrastructure. The Interconnector is not enough on its own, but is good for the energy mix. You have to see it as part of the wider mix.

“Simon Busuttil is not credible, and he said that he would remove the Floating Storage Unit if elected. This would mean Malta would only have Delimara 2 and the interconnector. Malta would be without energy. He would need to raise tariffs and have power cuts. This is reckless politics.

“We as a party respect the EC, which certified this project, and all the contracts are published.”

The agreements that exist are complicated and were scrutinised by KFW, HSBC, and BOV banks. Enemalta has the dispatch rights,

and can decide on where to use energy from. The contract has a number of performance measures for both Shanghai Electric and Electrogas. “

He said that the €30 million development fees from Electrogas were paid, and in addition there is an €18 million performance guarantee.

The Opposition did not criticise a single clause in the contract, he said. Turning to Delimara 3, he said Shanghai Electric Power paid €170 million for the share transfer, and a further €70 million investment to change it over to gas. He said the Electrogas plant will soon start providing energy into the grid.

He said that the security of supply agreement while approved has not yet been signed, but will pass through internal processes to be signed, and once this happens, we will table it immediately.

He also said that renewable energy targets are being met.

Simon Busuttil tears up the contracts

Opposition leader Simon Busuttil tore up the power station contracts which were published by government on Tuesday and Wednesday, saying that they are worth nothing as the important bits were redacted.

Dr Busuttil said that the power station is a symbol of government’s hoax. “It’s a confusion from beginning to end.”

He spoke about transparency, a pledge made by the Labour government. “After two years of begging for the contracts to be published, they published them two days ago. Dr Mario de Marco asked for this debate to be postponed so that a prepared debate can occur, but the prime minister didn’t want this. When we saw the contracts, we saw nothing but blacked out clauses. Your idea of transparency is a total blackout.”

“The most important parts of the contracts are blacked out. The amount government will pay for energy from Electrogas, through the power purchase agreement, is blacked out. One after another, they are blackouts.”

Dr Busuttil tore up the contracts, saying they are worth nothing as nothing can be seen.

“The PL was elected by saying the power station would be built in two years. The prime minister also pledged to resign if this didn’t happen, and then once the deadline passed he switched things around.”

“He said the PL had pledged not to privatise Enemalta. They lied. This is the symbol of government’s hoax. The biggest lie was announcing this project to reduce energy tariffs, when the tariffs were lowered and the plant is not yet completed.”

“You reduced tariffs four years ago, then how on earth can you say that this was made possible thanks to this station, which is not yet completed.”

He said that oil prices had been cut by 66%, yet tariffs stayed at the 25% reduction price.

He said that there are people who have come knocking on his door crying, as government cut off their electricity as they struggled to pay the bills. “They close their eyes for people with accounts in Panama, but not for the little people, who struggle to pay bills.”

Turning to Brian Tonna, he said that he opened up companies for a person who was employed with Shanghai Electric Power, and not just Minister Konrad Mizzi and OPM Chief of Staff Keith Schembri. He also said that Brian Tonna has his office next to the prime minister’s, thus the prime minister knows who owns Egrant. “We ask the prime minister and his response is to tell me to tell him who it belongs to.”

He said that the PN will investigate all contracts signed by Keith Schembri and Konrad Mizzi “as for us they are suspect. We will renegotiate these contracts, as we work in the national interest. We will ensure that the gas tanker is taken out of the Marsaxlokk Bay as quickly as possible. In addition, a government led by me will purchase electricity from the providers that it makes most sense for us to purchase from.”