A recent Parliamentary Question concerning Enemalta Corporation revealed that this public entity started recouping some of its millions of euros in debt only recently, after the energy tariffs were increased to include return on capital employed. The Finance Minister told Parliament last week that Enemalta’s current debt stands at €500m and this figure does not include the additional outlay for the Delimara power station extension and the cable connector to mainland Europe.

From the minister’s explanation it transpired that the corporation was forced to recoup its capital employed before banks would consider financing for the Delimara power station extension.

On the basis of this declaration, one has to analyse the facts as they have been presented with regards to the current energy tariffs, the Delimara power station extension and bank financing. For a start, Enemalta has been issuing tariffs throughout all these years and, according to official information given in Parliament, the corporation only added production costs before the tariffs were increased to recoup investments made throughout the years.

The reason for this anomaly has not been given but it is somewhat strange that the Corporation, which has now amassed such a substantial debt, explicitly refused to recoup the capital employed for such a long period of time. This cannot be accepted as an oversight especially when considering that Enemalta has been borrowing from banks since 1994 and the loan amount increased significantly each year. Perhaps the government should explain Enemalta’s policy of not recouping the capital employed.

Another interesting fact is the extent to which banks have exposed themselves and continued providing funds to the corporation with Bank of Valletta owed the substantial amount of €275.5m. While the loans were not repaid for more than 16 years, the minister should also explain how much has been paid in interest, and how much interest remains outstanding.

Another factor which stands out with regards to Enemalta and the Delimara power station extension is the amount of funds already paid to BWSC while this controversial case continues to be debated at length. As a matter of fact, the Public Accounts Committee is set to interview a number of people in an attempt to discover whether the alleged claims of corruption can be proved.

Nevertheless, as the Finance Minister explained a few days ago, BWSC has already received payments totalling €111m for works completed on the extension at the Delimara power station. This means that while the controversy alienated the nation, BWSC was busy working on completing the €200m extension and swiftly receiving payment. With more than half the project completed, and government ensuring that payments are affected without undue delay, the extension could possibility be completed before the controversy is concluded once and for all.

Without doubt, the efficiency of BWSC in executing its contract has to be lauded and even more so government’s haste in approving and issuing payments. What remains to be seen, however, is when the €111m already paid to BWSC, or the total projected cost of €200m, will be factored into the electricity tariffs.