The company behind the gas deal with the government, ElectroGas Malta Ltd has yet to be formed, which raises questions over who the government signed the power purchase agreement with. The Times reported that the deal was signed ‘behind closed doors’ on 9 May.
As of yesterday, ElectroGas Malta Ltd was still on the Malta Financial Services Authority’s (MFSA) reserve list. The ElectroGas consortium, which is made up of four companies, is not a legal entity therefore it cannot sign a contract with the government.
One of the consortium members, Gasol, has announced its intentions to purchase 30% of a company formed by Enemalta, called Malta Power and Gas Ltd (MPG). No official word as yet has been heard from the other three consortium members.
Gasol announced the share-purchase agreement in a press release issued on 14 May, saying that “the remainder of MPGL's shares will be acquired by the other members of the ElectroGas consortium as follows: SOCAR Trading SA (20%), GEM Holdings Ltd (30%) and Siemens Projects Ventures, the equity financing arm of Siemens Financial Services (20%).”
MPG Ltd. is the company that holds all the permits for the gas-fired Delimara plant. On 9 May, the day that the deal was supposedly signed, MPG Ltd. announced that it will be increasing its share capital, paving the way for the four ElectroGas consortium members to buy into the company.
It is only after all four consortium members have purchased shares in MPGL that ElectroGas Malta Ltd will be formed.
An industry source said that one possible, albeit unlikely explanation is that in a single day, MPG Ltd. approved the issue of shares, sold them to the consortium members, negotiated an agreement that is mutually acceptable to all parties, and had it signed by all parties on the same day.
This scenario, the source said, is unlikely given the complexity of such negotiations.
One other possible explanation is that Gasol, the only company to publicly commit itself to a share-purchase in MPG Ltd. to date, is taking the lead in the consortium and is acting as the official contact point with the government for the contract’s execution.
This too seems unlikely as it would make far more sense for the Maltese GEM Holdings Ltd to lead contract negotiations with its own government, rather than the West African Gasol.
Prime Minister Joseph Muscat has given mixed signals about the state of the deal. During a television debate last week, Dr Muscat initially said that negotiations had reached an advanced stage and the contract was going to be signed soon.
During the same debate, Dr Muscat then backtracked, saying that the contract has in fact been signed.
The Malta Independent last week filed a freedom of information request, asking to be given access to the agreement that has been signed between the government and Electrogas.
Following this paper’s request, Dr Muscat said that he intends to publish the power station contract for public scrutiny and is currently seeing what commercially sensitive information it may contain to eliminate it before publication. Questions sent by this newspaper to the Office of the Prime Minister in connection with the story remained unanswered.