Questions are being raised over the sale of Enemalta's Petroleum Division to two state-owned companies because the corporation's only profit-making section "should have been sold" to a Lebanese company that had been awarded the privatisation tender by the previous administration.
It was revealed yesterday that the Petroleum Division was sold off for some €80 million to Petromal Co Ltd and Enemed Co Ltd - both owned by Malta Government Investments.
The two companies, which were only set up a fortnight ago, now own the division, including its installations in Birzebbuga and Has-Saptan. According to the reports, the unannounced move was made so that Enemalta could pay part of the €150 million it owes to the government in excise taxes.
However, sources pointed out yesterday that the previous administration had bound itself to sell the Petroleum Division to the BB Energy back in 2008. The Lebanese company was announced as the preferred bidder six years ago. In 2011 it was reported that the privatisation process was in its final stages. The process later fell into disarray because of environmental planning issues. An alternative site to the Birzebbuga tanks could not be found at the time.
A source close to the privatisation process confirmed yesterday that neither administration has ever announced the cancellation of the BB Enegy tender. Besides, any tender launched by a previous administration has to be honoured by a successive government.
The source asked; "Does this mean that the agreement is still valid? Has the government breached the tender conditions by selling the Petroleum Division to itself? Or has it reached some sort of undisclosed agreement with the Lebanese company? If yes, has the government paid some sort of compensation?"
Another source explained that the government could always change its mind but at least it would have a duty to inform the bidding company. The bidder would also have the option to take the government to court. The government has repeatedly hinted that it will start the privatisation process anew, hinting that the BB Energy tender is dead and gone.
When contacted yesterday, the Chairman of Malta Government Investments said he was not in a position to comment on the media reports since he is currently abroad. Adrian Said asked us to send questions by email but said the actual decision to buy the Petroleum Division would have been taken by the respective boards of Enemed and Petromal.
It is not yet clear whether Petroleum Division employees have been transferred to the aforementioned companies and, if so, whether they will keep the same salaries and conditions.
Works at Delimara continue despite announced delay
In other developments, works at the Delimara site were yesterday in full swing, despite the government's admission that the gas power station project has been delayed. Prime Minister Joseph Muscat finally admitted on Sunday that the project has been delayed for a number of months. The project was held up by three-way talks between Enemalta, ElectroGas and Shanghai Electric Power. The Chinese are reportedly demanding assurances that the government will buy all electricity produced by the BWSC plant, which will be converted to run on gas by SEP. It has long been argued that the 200MW that will be built by ElectroGas, and the interconnector, will between them provide more energy than required.
This paper went to Delimara again yesterday and saw that works launched last week have progressed significantly, with a large chunk of a massive mound of earth and clay having been since removed. The diesel tanks which until last week were hidden behind the mound of earth are now visible from Birzebbugia. The works are being carried out at the site where the regasification unit is planned.