Investments and Industry Minister Austin Gatt explained that the current oil storage facilities include sites such as Has Saptan, Kordin, Aviation Fuel Storage, Wied Dalam and the 31 March plant. Apart from these there is also the storage facilities of the Malta Oil Tanking Company Ltd., those of the MOBC and the San Lucjan Complex.

Dr Gatt said the first decision the government had taken was to start the process to close the Birzebbuga plant which, apart from seepage of oil, was creating other environmental problems to the residential area in the vicinity.

Dr Gatt said the plant was having an adverse effect on the value of property in the area, an impact on the locality’s landscape and increasing hardships on the residents. The target date set by the government is 2007, but the plant may be closed before this date.

He said Enemalta is committed to a de-contamination process of the existing facilities and the rehabilitation of the area. He explained that according to a European Union directive, Malta has to have a 90-day oil storage facility. Thanks to a derogation obtained by the government, Malta has till 2007 to fully adhere to this directive.

The second decision the government took was to stop the privatisation process of the MOBC for two reasons. The first is that the government obtained a number of offers from several key players in the field but not the expected amount of money. The second reason was that Malta needs to have the 90-day storage facility and needed to utilise the storage facilities of the MOBC.

Dr Gatt said that when both reasons were seen together, the government decided to scrap the idea of privatising the company. Another decision in connection with the MOBC was to stop the bunkering service because there are other companies which offer this service at a perhaps more competitive price.

This means that the MOBC will be integrated in Enemalta Corporation which will use the facilities for the storage of fuel and the MOBC employees will start working with Enemalta.

The final decision the government took was to commercialise Enemalta’s oil operations. This would give the company the possibility to concentrate its efforts on its core business: the generation and distribution of electricity.

Another reason behind this decision was the liberalisation of this market on 1 January 2006. This would mean that Enemalta, after this date, would face stiff competition in the sector.

Dr Gatt said this commercialisation could take the form of strategic partnerships, joint ventures, public private partnerships. However, the company’s assets will not be sold.

He said the advantages include creating synergies with multi-national companies, improving Malta’s competitiveness, attracting foreign investment, utilise better Enemalta’s assets and increasing revenue for Enemalta. Along with this process, the company will also review its management system.