PN leader Simon Busuttil today strongly deplored the fact that the government has subtly acquired a €360 million bank guarantee in the midst of summer so that Electrogas can implement the delayed power station project.

Addressing a news conference at the parliament building along with a number of PN MPs, Dr Busuttil said it is abnormal to address such a conference on the eve of the Sta Marija feast when everyone is on holiday but lamented that it is not normal either for the government to place such a big burden on the public behind its back.

What started off as an €88 million guarantee has suddenly shot up to 360 million.

Dr Busuttil said that the reason for this guarantee is for Prime Minister Joseph Muscat to save face.

He said that Dr Muscat had no way out but to resign had he not got this guarantee in place since the power station project would have failed once again.

“This decision means that Dr Muscat is placing his personal interests before the national interest. The PN deplores this fact,” Dr Busuttil continued.

Dr Busuttil explained that the government called on a handful of journalists to try simmer out the situation. He referred to the fact that the finance minister had said that had the government published the €88 million bank guarantee agreement there would have been economic turmoil. “How’s €360 million for economic turmoil?” Dr Busuttil asked.

He said that the State guarantee was never on the books for the running of the new power station.

Dr Busuttil said that he expects the Auditor General to thoroughly investigate the process used in the issuing of a bank guarantee of €360 million, adding that the PN will respect the decisions of the Auditor General. 

The bank guarantee was a choice – Energy Minister

The €360 million bank guarantee was by choice, Energy Minister Konrad Mizzi said this evening.

Dr Mizzi said that the bank guarantee is only available up to 22 months, stating that 22 months would be the worst case scenario in terms of the time it would take the European Commission to give the green light for the Security of Supply agreement.

“We could have waited for the European Commission, however we decided on this temporary measure to keep moving forward. It is a good project with good contracts. The benefits it would bring include low tariffs and better fuel rather than heavy fuel oil”.

Challenged with the fact that government is tied down by electoral timeframes for the station’s completion, the Minister still insisted that the guarantee was a choice, adding “that if we wanted we could have made it a government project. It’s a good project, a profitable project and we could have done it. But we believe in the private sector and it was a conscious choice”.

“It’s beyond electoral promises, its about the economic success of the country”.

The Minister challenged with questions admitted that the tariff reductions are tied to the completion of the power station. He also said that the choice was to wait for clearance, or go ahead with the project "which we are confident will go through" .

The Minister also said that the security of supply agreement will remain in draft format until the Commission gives the ok, and that all partners involved in the deal, including the banks have agreed to this. He stressed that the Commission guidelines were followed, explaining that the 80% guarantee by government is one such guideline and that the consortium had to take out 20%. He said Electrogas also took out €9 million which is the market rate and was established by a Deloitte Ireland report.

He explained the guarantee itself goes along with EU guidelines.

Describing the Security of Supply agreement, the Minister said that this would guarantee that should Enemalta fail, or if something were to happen and no national electricity provider was present, then government would step in to supply the electricity and gas.

He said that the Security of Supply agreement was in the tendering process, however this guarantee was not.  He stressed that this did not give any unfair treatment.

He said the PN is doing all it can to stop the powerplant from reaching a point of operation. “They began in the beginning by telling the EU Commission to investigate the process, which they had and said everything was fine. They wrote to the Commission again telling them that we weren’t following the Environment Directives, yet the Commission’s review found that everything was going according to process - and more recently a PN MEP wrote to the Commission about the LPG tanker, yet the Commission  said the tanker is safe and that we followed due process”.

He stressed that this is a project in the national interest and not one of Muscat or of himself personally.

Our lawyers looked at the state aid rules, the banks lawyers did the same and so did those from Electrogas, he said.

Minister Mizzi also said that the PN, when in government, had entered into a €320 million guarantee agreement with Vault Finance for the Old Delimara 1 plant, saying that the guarantee is still valid today.

PL statement

In a statement the PL said that, after describing the reduction in energy tariffs as the gimmick of the millennium he is now trying to take credit for it. Now he has also said that it is obvious that the project will be carried out. “It seems that it was not only the weather that got confused this month,” the party said.