The Malta Independent 25 October 2016, Tuesday

Minister Konrad Mizzi insists all Electrogas consortium members are financially sound

Neil Camilleri Monday, 17 November 2014, 08:50 Last update: about 3 years ago

The government was given the necessary assurances by Electrogas that the consortium is financially sound and has met all the required criteria, Energy Minister Konrad Mizzi said.

Mr Mizzi was replying to a Parliamentary Question by PN Deputy Leader Mario de Marco, who asked whether the companies that had replied to the expression of interest for the multi-million project had been asked to prove that they are financially stable and are not at risk of bankruptcy.

Mr Mizzi said Electrogas was chosen after a rigorous evaluation process during which the government made sure that all the requirements were met. "The technical capacities of the consortium were analysed during the evaluation period, including its financial footing and the information it produced on the viability of the project."

In a subsequent PQ, Dr de Marco asked the Minister whether he was informed that one of the consortium members, Gasol, was insolvent and did not have the money or assets to cover its requirements, as seen in its 2014 audited accounts.

A couple of weeks previous, Mario de Marco had questioned how the government had overlooked Gasol's insolvency during the tendering process. The Gasol report titled 'Funding and Going Concerns', said it had a mix of early stage opportunities and projects which would not generate revenue for several years. "As a result, the company is likely to be required to obtain significant capital in the future. There is no assurance that it will be able to raise such capital when it is required or that the terms associated with providing such capital will be satisfactory to the company. The Group is reliant upon its ability to successfully raise further financing to settle existing loan repayments and fund working capital. The Group does not currently hold sufficient cash or liquid assets in order to meet its commitments as they fall due for the next 12 months."

In reply, the Minister referred the PN Deputy Leader to a press release issued some days earlier by the Electogas consortium in which it insisted that all its members - Siemens, Gasol, Socar and GEM Holdings - are dedicated to completing the development of the project as quickly as possible and in accordance with all agreements and time schedules agreed with Enemalta. Electrogas also said each member possesses ample financial resources to continue funding the development costs of the project and their respective equity contributions needed to pay for the construction of the project. This includes Gasol, which raised $30 million in the international bond market earlier this month.

The consortium said it "continues to be supported by a group of high profile international banks, who also provide the balance of the funds needed, on a project finance basis, for the construction of the project." It also insisted that it will honour all of its commitments in Malta.



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