The Malta Independent 25 October 2020, Sunday

TMIS Editorial - Electrogas: More than a public inquiry is required

Sunday, 18 October 2020, 11:30 Last update: about 7 days ago

The Opposition has been calling on the government to launch a public inquiry into the Electrogas power station contract and has even filed a parliamentary motion to this effect.

We do not fully agree with this request, not because we do not feel that investigation is warranted, but because we believe that, rather than a public inquiry, there should be a full-blown police investigation.


The Electrogas project has been in the news since well before it was even approved and built. Over the years, the project has been marred by claims of corruption and has even been linked to the murder of Daphne Caruana Galizia.

Joseph Muscat’s government was intent on realising the project. It was one of the biggest, if not the biggest electoral pledge of the Labour Party in 2013. The project, we were told, was crucial for the Maltese economy, and for utility bills to go down. But a reduction in energy bills (even if this claim is often disputed), is more than we got.

One of the central figures in the project was Yorgen Fenech, who now stands accused of masterminding Daphne’s murder. Fenech was forced to resign from Electrogas in November of last year, a few days after his arrest. But that should not be the end of the story. It cannot be. Kicking out the person suspected of corruption and murder does not make everything else go away.

This week, the Daphne Project reported that Electrogas investors Mark Gasan and Paul Apap Bologna signed off on a side deal to pay Yorgen Fenech €2.5 million in fees for “sourcing and organising contractors” and “interfacing with authorities” on the project.

Both individuals have told a public inquiry board a few days ago that they were not aware of Fenech’s dealings and alleged links to 17 Black and the murder of the journalist who was investigating the Dubai-based company.

Apap Bologna told the board he was unaware of Fenech’s closeness to Joseph Muscat, Keith Schembri and Konrad Mizzi and only learnt of it through media reports. The Panama Papers and 17 Black issues were discussed at GEM level but the conclusion was that there was “nothing untoward.”

Fenech had not given an answer when asked if he owned 17 Black, Apap Bologna said, adding that he was unaware of Fenech’s dealings with Turab Musayev, who was involved in the controversial Montenegro deal.

Mark Gasan said Fenech had denied being the owner of 17 Black but the issue remained of concern to him even after the denial. He added that, “we had been wanting to see Fenech exit from Electrogas” since 17 Black. "Links were being made between this project and the assassination - once that happened, it wasn't something we could fathom."

Pertinent questions have been raised as to how two major shareholders in the project were unaware of Fenech’s links, and how they were comfortable working with him even after the 17 Black ownership story came out.

Several claims over the power station project have emerged over the years. These included leaked emails that showed untoward links between government and the consortium members, how an OHSA official was warning the company about upcoming spot-checks, and how the government agreed to defer an €18 million penalty for the late delivery of the project by 18 years.

The project has been under immense scrutiny, including by the National Audit Office, which had found that the Electrogas bid did not comply with minimum requirements to win the contract on “multiple instances.”

It had also found that energy purchased through the interconnector was cheaper, and that the departure of Gasol plc was in breach of the contractual obligations in force at the time.

There was also the story about how a company that was central to the awarding of the deal to Electrogas – Beat Limited – had received a €6,000 direct order from Enemalta to review the findings of the National Audit Office.

There is also the issue of the €40 million in tax that Konrad Mizzi wrote off, and the controversial multi-million guarantee issued by the government to prop up the company at a time when it was practically bankrupt.

Then there is the role of Nexia BT, which had already been outed as the company that set up Konrad Mizzi and Keith Schembri’s Panama accounts, and which has refused to reveal who the owner of Egrant is. The company recently lost its license to operate, and its two main players had their accountancy warrants suspended, in the wake of a magisterial inquiry into alleged kickbacks paid by Brian Tonna to Keith Schembri.

The Electrogas deal stinks to high heaven. There probably never was a project locally that was so mired in controversy. And we the people are being robbed of millions in waved fees and higher fuel prices. It is a similar story to the VGH hospitals deal.

So no, the resignation of one of the directors is not enough. Neither is a public inquiry. A full-blown police investigation is warranted into this monument to corruption.

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