When Labour came up with its embryonic proposals regarding fuel prices, readers of my articles will remember that I was more than sceptical. I could not see the whole point of it.

After all that has been said in the past months, I am still unconvinced. The government makes a big deal about how Enemalta was practically bankrupt and how energy prices in Malta were among Europe’s highest.

One must put everything in context: Enemalta has come a long way from the government department it was until a few years back. It had to cope with years of no investment (thanks to Dom Mintoff) and had to make do with second-hand boilers that first used coal and then heavy fuel oil. It has had to cope with the enormous expansion of the construction industry, which is even greater than the expansion of Malta’s population. And it had to keep prices down.

Now I know that Labour has been making a big deal about the price of electricity in Malta being among the highest in Europe as if that was some kind of heinous machination by the PN government to make everybody poor. There are cogent reasons for that: Malta does not have rivers so hydro-electric power is out; it does not dare use coal; and its insularity means it has to get all the fuel it uses by ship. And of course so far it has not found oil on its territory. Other countries have hydro-electricity, etc and of course economies of scale.

The first Delimara power station was a child of its time – massive and takes hours to fire up in case of a blow out. So the government went for a simpler and more flexible extension, which was soon hit by two misfortunes. First it was commissioned from BWSC and was the first such plant in the world. Labour found out all the dark corners regarding the original manufacturers and also spun that there must have been some kind of corruption for it to get the contract. That has never been proved, but the aim of a spin is never to uncover the truth.

Its misfortune was the change in plans for it to be run on gas instead of on HFO. Again, spin played a massive part. The fact is the plant is still running on HFO, the cancer factor forgotten, and Enemalta is making massive savings because of the new plant’s flexibility.

These huge savings are not enough of course to put Enemalta on an even keel, but they do help. The second plank in the former plans for Enemalta to reduce the cost of fuel was the Interconnector, which is now coming along but is still not there either. This can bring electricity at a cheaper rate than the Delimara and BWSC plants can.

It was a gradual plan that would have strengthened the sustainability of Enemalta as a whole and kept it all Maltese. But the PL-in-a-hurry in Opposition was not having that. It saw the opportunity for a good vote catcher and it went for a drastic promise to cut the price of electricity within a set time-frame.

This was CET all over again. CET was the brainchild of Alfred Sant in 1995 when he sought to capitalise on the abhorrence Maltese businesses had for the incoming VAT.

We know how it finished. Lino Spiteri, Labour’s financial guru, was not even consulted by Sant when he launched the commitment, but he later took part in the election, was elected and was made Minister of Finance and had the baby dumped on him. He played around with it for six months, found he could do nothing and resigned. Sant later, humiliatingly, retracted CET.

I say this Enemalta business is just like CET in that it was a plan created in Opposition and mainly as a vote catcher. It worked, and it worked even in the EP elections just a few weeks ago when one would have expected the people of Marsaxlokk to rise in revolt at the plans to park a huge gas ship inside the bay.

But it is worse than CET because Alfred Sant at least had the decency to stop when it became clear the plan would not work while Joseph Muscat keeps going full speed ahead.

It is difficult for us outsiders to know how much of the plan was ready and fleshed out before the election, or how much is being ad-libbed when a difficult patch is reached. I suspect it was mostly the former: the plan now being carried out was ready in all its fundamentals but kept secret.

There has been no expression of the government policy such as through a White Paper or Brief, no call for an expression of interest, no competition among competing bidders. It was all Chinese right from the beginning and the formula used was government-to-government.

I do not want to personify the issue or add to the Sai Mizzi hounding, but as I see it, apart from getting all those euros from the government of Malta, she should have been rewarded by the Chinese government too for bringing this deal about.

The Chinese deal is slowly emerging and the details are astonishing: the Chinese government gets one-third of Enemalta in return for a cash injection, the BWSC plant is sold, converted to gas, and the government enters into a commitment to buy electricity for a number of years (18?), a new power station is built and later on there will be a gas pipeline, but in the meantime there will be a ship being periodically replenished inside Marsaxlokk Bay. I may have left some details out.

Somehow, besides the Chinese government, the Azeri government is also involved, again another government-to-government deal. Neither the Chinese nor the Azeri government are the type of democracy that Malta has been used to dealing with, but in politics as in business, these do not count for much.

All this, remember, is in aid of a corporation, Enemalta, that was creaking with age, laden with debts, with some cash flow problems thrown in (I am in two minds who to blame – whether it was the rash introduction of ARMS or because people, like what happened with VAT all those years ago, just held back on payments in anticipation of paying less).

Whatever is said now, in defence of this new regime, the fact remains that Enemalta was in no crisis; it was on the contrary coming along nicely and had its own plans for a more sustainable future.

People mention at this juncture the fuel procurement scandal (which is still sub judice) and the biased declarations of a self-admitting participant in corruption for tenders. That is neither here nor there: corruption can crop up at any time and in any place and it is the duty of every government to be on the lookout for signs of it and to eradicate it by all means.

Again, the sale of one-third of Enemalta is not being done because of this scandal. It was a plan long in coming. Someone is benefiting from this and if the Maltese population is benefiting because of reduced tariffs, this is a very small gain compared to what the Chinese are getting: one-third of Malta’s sole power generation and guaranteed sales for so many years.

But just like CET, in time, as the plan has been revealed, some collateral damage has started to appear.

There is uncertainty, and worse among the Labour rank and file because of the high-handedness with which all this is being handled. It is as if there is a government-within-the government, and once again the movement is driving the Labour rank and file. I do not think the real Mintoffian core has actually understood the implications of selling one-third of the power station to a foreign power, even one like the Chinese with whom Mintoff was palsy-walsy.

And there is all this uncertainty among Enemalta workers even though they chose to close ranks when questioned by the media after their GWU meeting on Friday.

I am sure that the developers of this project never anticipated these two developments. I am sure these two issues will not stop the government in its tracks, seeing it is absolutely determined to implement the plan.

That is why I say this is like CET because essentially it was a vote-catcher, but much worse than CET because Sant stopped when he realised what he was proposing was wrong while Muscat actually increases the speed.

 

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