Gasol, which has been reported to have been ailing financially, has been removed from a new and improved company structure announced by ElectroGas Malta, which is building the new Delimara power station.

The company announced this afternoon that the new company structure will result in three partners with equal shareholding (33.333%) in ElectroGas Malta: Siemens Financial Services, Socar Trading SA and GEM Holdings Ltd.

Siemens will serve as the lead member.

Gasol previously held a 30% stake in the company, like GEM Holdings, while Siemens and Socar held 20% each.

“The rearrangement of existing partners within the consortium is being done to maintain the long-term stability of the project company which will supply energy and natural gas in accordance with its commitments to Enemalta and all stakeholders, ElectroGas said in a statement.

“ElectroGas Malta remains fully committed to its obligations to deliver the project that will introduce natural gas for power production in Malta, and all the environmental benefits associated with it, within the agreed timeframes.

ElectroGas Malta thanked Gasol plc and its executives for “the dedication and contribution given to the project to bring it to this advanced stage and wishes them every success in their future projects”.

Gasol’s latest financial statements showed that the company could have problems raising cash for its ongoing projects. The company has been delisted from the London Stock Exchange.

For the second year running, the company posted a massive loss with negative equity of €12.8 million and accumulated losses of €96 million.

The government last month authorised an €88 million guarantee to cover Electrogas’s exposure to a €101 million loan from Bank of Valletta.

But the government refrained from giving more details on the guarantee which raised concern largely because of Gasol's precarious financial position - saying that their publication could have “a substantial adverse effect on the ability of the government to manage the Maltese economy.

Apart from potentially creating turmoil in the economy, disclosure of the document may also “have a substantial adverse effect on the financial or property interests of the government or of another public authority”.

It was also deemed that “the public interest that is served by non-disclosure outweighs the public interest in the disclosure.”

 

Government praises commitment of remaining partners

In a press release this evening, the government welcomed the increased commitment demonstrated by Siemens, Socar and GEM to the Malta Gas and Power project.

“Government welcomes positively the consolidation of the Electrogas Malta Consortium and the ongoing and now increased commitment shown by Siemens, Socar Trading SA and Gem holdings LTD.  

 As part of this consolidation, these three companies have increased their shareholding in Electrogas Malta and have demonstrated their commitment to the project. All three partners will have equal shareholding in Electrogas Malta with Siemens as the Lead Member.

The increase in shareholding by two world-class corporations and a leading Maltese holding company shows the importance these companies attribute to the project.

 The project commitments remain unchanged and the momentum is being sustained in the development phase.

The implementation of this major investment will not only result in economic benefits as outlined by credit rating agencies but also in significant environmental benefits and the reduction of emissions.”

The government press release made no mention whatsoever to Gasol’s exit from the consortium.

 

Opposition reacts

In a statement, the Opposition said that the news confirms that the power station project was a farce from the start.

The power station which was meant to start operating four months ago, has now lost the most important company in the consortium, the statement says.

“For the past two years, the Opposition has been raising questions on the viability of the project, however the government tried to ridicule our concerns. If it was not for the independent media and the Opposition, the problems surrounding the project would have been kept under wraps,” the Opposition said.

The PN said that the fact that Gasol has backed out of the project sheds serious doubts on whether the public procurement process remains valid and confirms that the due diligence carried out was amateurish. It also confirms that the government made a mistake in securing an €88 million loan guarantee. 

 

The PN noted that Dr Falzon had admitted his involvement. He should come clear about corruption practices, it said.