The Nationalist Party, when in government in 2009, had received a near-identical proposal for the construction of a new LNG-fuelled power station in Delimara as that being implemented by the current government, The Malta Independent on Sunday can confirm.

The sales pitch in 2009 bears a number of striking similarities to the project that is being brought to fruition by the current government, and which had been a cornerstone of its election campaign.

Such similarities include the floating storage and regasification unit (FSRU), otherwise known as the LNG tanker, which is to be permanently berthed alongside the power station at the Delimara quay, and the involvement of Gasol plc, the company that in 2015 cashed in its shares in the consortium for an undisclosed amount estimated to have been in the region of tens of millions of euros.

During last Monday’s no confidence motion debate in Parliament, Opposition Leader Simon Busuttil had referred to the proposal saying that it was practically identical to that implemented by today’s government. He said this suggests that today’s government would have received a similar pre-election proposal and that, as such, the government’s call for expressions of interest and the competitive process won by the same consortium had been a sham from the get-go.

This newspaper has since gained access to the detailed proposals, which, it turns out, had been proposed to the previous government way back in 2009.

Documentation seen by this newspaper suggests that the expressions of interest and the competitive bidding process which the government claims had been carried out in awarding the contract for the LNG-fuelled new power station in Delimara to the Electrogas consortium, may have been a matter of simply going through the motions to lead to what may have been, in effect, a foregone conclusion.

According to that documentation, the original consortium had comprised Gasol plc, International Power plc and “a group of Maltese investors… assembled and led by Paul Apap Bologna”. Of this latter group, the documentation seen by this newspaper states, “We do not want to come to Malta as an entirely foreign group. The investor group will comprise a diverse group of Maltese citizens and prominent business families.”

International Power plc, which had eventually dropped out of the fledgling project, was a multinational electricity generation company headquartered in London. The company is now owned by Engie Energy International.

The consortium had originally proposed a power station with twice the generation capacity as that currently being built, i.e. of 400MW. The proposal also provided for the consortium to supply LNG fuel, storage and regasification. 

It had also proposed that: “We will undertake all funding, implementation and operational commitments to deliver the project” and that “we would be willing to manage the Delimara plant under contract and in portfolio if the government desires.”  And, as matters currently stand, the consortium proposed that “under all circumstances, Enemalta remains the grid operator and sole seller of electricity in Malta.”

The Greener Energy for Malta (GEM) consortium as it was then known, also pitched a 30-40 per cent saving on wholesale power prices.

 

FSRU solution concealed from the electorate

While the current government had apparently toyed with the concept of storing LNG on land adjacent to the new power station, the 2009 proposal appears to have ruled out such a set-up in favour of the FSRU.

The installation of the FSRU right smack in the middle of Marsaxlokk Bay had proved to be, and still is, a major bone of contention when it was proposed, long after the election. The Labour Party in opposition was apparently wise to the fact that the permanent LNG tanker would not have gone down well with the electorate and as such had concealed the plan from public view, only to turn around and implement it as was obviously originally planned.

In fact, the consortium had proposed berthing the permanent FSRU in Delimara right where it is projected to be berthed in the current project – and the proposal no doubt survived until it was implemented by the party once it gained power.

The consortium had proposed back in 2009: “We suggest locating the mooring site adjacent to Delimara. It appears that the water depth is sufficient to get the vessel in without dredging.”

It also proposed that LNG would be purchased on the market by the consortium and transported to Malta, that LNG would be regasified “in a specially designed FSRU (Floating Storage and Regasification Unit), and that the FSRU would be “located opposite Freeport Harbour”.

In 2009, the consortium had given the project a three-year timeline, following a year of preparatory work to finalise the project’s details and to come to a final investment decision.

The consortium had said it would provide all equity investment and arrange all debt. It would, however, require: a long-term power purchase agreement guaranteed/secured by the government, all licences and permits and an operating contract for International Power, which is no longer present in today’s consortium. It also stipulates that the “consortium will not have pricing power”.

In order to take the project forward the consortium said it would need: “a clear understanding of the path towards project approval, a clear understanding of Maltese government issues, constraints and process and any assistance to provide a competitive project, such as preferential deprecation”.

The pitch concludes with the catchphrase: “The decision is yours – we will do our part if you will do yours.”