Former finance minister Tonio Fenech insisted this morning that Enemalta’s financial situation was far healthier than the government was suggesting as the budget estimates of the Ministry for Energy and the Conservation of Water were being debated.

Mr Fenech noted that the government expects its revenue from excise duties to increase by €55 million next year, and insisted that this was not due to economic growth. The main source of this increase, he said, was the government’s decision to increase duties on all types of fuel – including the heavy fuel oil Enemalta used to run its power plants.

He questioned rhetorically whether Enemalta could carry this burden, before stressing that it could, because it was far from bankrupt. He pointed out that the corporation was saving €1 million a week due to the BWSC-built power station at Delimara.

The former minister pointed out that Enemalta’s financial statements for 2012 had not yet surfaced, and said that this was because they would show that the much-vaunted debts in excess of €800 million would not be found. He noted that a special purpose vehicle set up took up much of the debt, adding that the corporation has to pay €22 million annually as a result, but that the debt would be cut.

Mr Fenech insisted that the government did not want to show that Enemalta’s financial situation was improving, leading it to levy a tax to increase its costs – and to claim, further down the line, that its own energy plan would be turning its fortunes around.

The MP also said that the pledged reduction in bills would be funded from the new taxes and the savings from the BWSC-built plant.

Gas pipeline ‘not feasible’ due to energy plan

The first speaker of the day was MP George Pullicino, the opposition’s spokesman on energy and water, who insisted that the government’s plan to purchase gas and electricity from the private sector made a gas pipeline unfeasible.

Mr Pullicino that instead, there will be a permanently-berthed ship that would ruin views of the Delimara peninsula. He pointed out that the government failed to explain that this ship would be some 280m long – the length of three football pitches – and seventeen stories high.

The MP said that Energy Minister Konrad Mizzi had lied ahead of the election, when his energy plan foresaw the need to store 60,000 cubic metres of LNG. The PN, he observed, constantly argued that more was needed, only to be proven right when the government’s terms of reference foresaw the need to store up to 180,000 cubic metres, while the winning bid foresees the storage of 128,000.

Dr Mizzi had also lied when he said that a 10-year fixed-price agreement was possible, Mr Pullicino noted, pointing out that his colleague Jason Azzopardi frequently, and unsuccessfully, asked the government to provide examples through parliamentary questions. The MP added that the opposition was vindicated when the government finally agreed to fix energy prices for just five years, spinning this by stating that consultants advised it that more long-term agreements would not be advantageous.

Mr Pullicino questioned the government’s pledge that household bills would go down by 25%, stating that the opposition’s own calculations suggested, for instance, that a single person would save 20%. The average saving in this case would be some €80, which he said was equivalent to the amount Dr Mizzi’s wife Sai earned in an hour as a special envoy for Malta Enterprise.

A family with two people would save €101, but if one of them smokes a packet of cigarettes a day the expense would rise by €109 with the increase in excise duty.

The former minister also said that the government had effectively neutralised the Malta Resources Authority, questioning why the authority had not spoken up on the proposed acquisition of a minority stake in Enemalta by a Chinese state-owned company. He later questioned why the company in question – Shanghai Electric Power – was chosen out of all Chinese energy companies, given its focus on coal.

Mr Pullicino also questioned what was taking place at ARMS and Water Services Corporation, noting how in the former, chairmen and CEOs have been replaced twice since the present government was elected last March.

At the latter, he said, the formation of a clique was evident, given the reckless changes that took place at managerial and even lower levels. As long as political allies were accommodated, he said, the management of the corporation did not appear to be so important to the government.

The MP also criticised the government for failing to provide water-saving kits to Maltese households, as had been pledged in both political parties’ electoral manifestos and in the 2013 budget.

Charlò Bonnici, the opposition’s environment spokesman, castigated the government’s apparent inaction and lack of long-term vision on renewable energy. He questioned why the government appeared to have given up on wind energy, despite new technological developments in the field which could make it more feasible.

The MP also insisted that the government’s energy plans provided no incentives to shift to cleaner energy, as they appeared to prioritise lowering bills over everything. He pointed out that the EU energy sector is expected to halve carbon dioxide emissions by 2030, although targets are not yet binding, but the long-term energy contract would tie the hands of future governments.

Mr Bonnici also criticised the lack of a Strategic Environment Assessment of the project, which he said was in blatant breach of EU regulations, and noted that the planned environmental impact assessment had been prejudiced by the fact that the government expected the project to go ahead nevertheless. He also noted that a draft assessment has been criticised as ridiculous and superficial by environmentalists.

Toni Bezzina focused on the impact the new power station would have on the south of Malta, stressing that the interest of those who lived nearby had to be prioritised.

Mr Bezzina questioned, among other things, whether fishermen at Marsaxlokk Bay would be affected by the permanent berthing of a massive ship to store gas, the dredging required to accommodate it and the manoeuvring ships delivering gas would have to make within the bay.

The MP also questioned the government’s decision not to switch to using diesel instead of heavy fuel oil – which it had castigated as carcinogenic – immediately after the general election as it had pledged.

The same point was taken up by the next speaker, Ryan Callus, who said that he watched with disbelief as Dr Mizzi said, on television, that the switch could not be made as by the time the tanks were emptied of heavy fuel oil to allow for a switch to diesel, the new power plant would be ready.

He questioned how the government could pledge to build the power plant in two years when it was apparently incapable of replacing fuel in a tank by that time.

Mr Callus insisted that the sale of a stake in Enemalta was a breach of the Labour Party’s pledge not to privatise the corporation, and sarcastically congratulated the government for coming up with the easiest plan possible to reduce its debts. He noted that a PN government did not follow suit because it considered the long-term implications of privatising a strategic asset.

The MP also questioned Dr Mizzi’s criticism of the PN’s night tariff plans, stating that the minister should not be concerned about the feasibility of the PN’s plans, but about the fact that the energy contract it was set to sign would make night tariffs impossible, despite the setting up of an electricity interconnector. He noted that the new power plant would generate some 200MW, which was higher than the peak electricity demand at night.

The last opposition MP to contribute to the debate, deputy leader Mario de Marco, also stressed the importance of night tariffs, criticising the way Labour had ridiculed it by stating that households would use their appliances at night. He noted that night tariffs were very important to hotels, industries and shops, among others, and hoped that they would be discussed on a technical, rather than partisan, basis.

Dr de Marco also emphasised that no information had surfaced about the planned sale of a stake in Enemalta, pointing out that not even the stake the Chinese company would purchase was known and questioning when this “secret sale” would be properly discussed. He also questioned the wisdom of selling a stake in a public corporation to the public corporation of another state, emphasising that the state in question was not the issue.

The MP noted that both sides agreed on the need to shift to using gas to generate electricity, although they differed in the implementation. He pointed out that the PN’s arguments in favour of a gas pipeline appeared to be vindicated by confirmations that the project may be co-financed by the EU and a government report to the EU mentioning a feasibility study on the pipeline.

Dr de Marco questioned what will happen once the 5-year fixed-price agreement is over, pointing out that while the government was presenting the project as not costing anything to the public, the consumer would ultimately have to pay.