The Opposition has filed a formal request, through parliament’s Standing Orders, calling on the Auditor General to investigate the contracts signed by the government with Electrogas on the new power station.

Addressing a news conference at parliament, Public Accounts Committee chairman Tonio Fenech said the Opposition's decision followed the departure of Gasol – a shareholder in the company involved in the new power station project – from the Electrogas consortium.

He said that the government had failed to publish any agreements it made on the new power station, including the power-purchase agreement.

The Opposition also asked the NAO to investigate the procedure used leading to Electrogas being chosen as the preferred bidder and to look into the unprecedented €88 million government guarantee to cover a loan given to the consortium.

PN deputy leader Mario de Marco said the government keeps refusing to reveal any information on the preferred bidder, adding that everyone has been left in the dark.

He said that the warning signs were there for all to see, referring to Gasol’s financial problems which were revealed in their annual financial statements published last year.

“There was never any assurance given that Gasol can honour its obligations,” he said.

PN MP Claudio Grech said that at no point in time did the government ever make reference to the fact that Gasol would not form part of the consortium any longer, despite the fact that the issue of Gasol came up many a time during parliamentary debates.

He said the government had said that the funds to sustain the power station project had been found, only to learn that the government had to step in to cover a loan given to the consortium by Bank of Valletta. He said that BoV had to succumb to government’s pressure and grant the bridge loan, adding that this exposed the bank to potential risks.

PN MP Marthese Portelli questioned whether there was a need for a new power station when the government was claiming that the energy tariffs have been reduced when the power station hasn’t even been built.

She said that that the government had said that the tariffs would only be reduced as a result of the new power station project but at the same time was claiming that the tariffs have been reduced. "Do we really need a new power station," she asked.

She said that Electrogas never had a good track record since it never stuck to its timelines and the government kept extending deadlines. She said that Electrogas was not even able to get a loan and it was the government which had to step in and act on its behalf.

Government already in contact with NAO

Meanwhile, in a statement, the government reiterated that it welcomed the consolidation of ElectroGas Malta. World leading engineering and power company Siemens and gas giant Socar have increased their commitment to the project by increasing shareholding. The change in shareholding followed due process, the statement said.

“The government on Tuesday sent a letter to NAO about the matter to clarify facts. A meeting with NAO has already been set up.

“The government welcomes all scrutiny on the matter and reiterates that due process was followed. Moreover the increase in shareholding by two global giants is testament to confidence in the project which is progressing to plan."

It reiterated that the specialisation, skills and knowledge required to implement and operate the power and gas facilities have not changed and are still vested in ElectroGas through Siemens and Socar. Construction, operations, maintenance and all other contracts remain unchanged.

“The recent consolidation will have no impact on project timelines, construction and provision of power and gas to Malta and the Maltese people,” the statement continued.

The government assured that ElectroGas, through Siemens, Socar and GEM holdings, has strong financial backing and will deliver a world class infrastructure which will continue to contribute to the country's competitiveness and also reduce emissions significantly.

“As confirmed by various credit rating agencies, this government is managing to turn around the energy sector. A sector that was almost nonexistent during the previous administration and that was seen as a burden rather than an opportunity by the same administration.

“This government managed to turn around this sector whilst reducing bills for families and businesses and whilst solving the mess that the previous administration left in Enemalta.

“The Opposition still cannot accept the fact that tariffs have been reduced to the tune of 80 million euro per annum and that heavy fuel oil is being phased out,” the government said.