The Malta Independent 14 April 2021, Wednesday

Leaked emails detail overcompensation to Electrogas shareholders – PN MPs

Karl Azzopardi Thursday, 22 October 2020, 21:13 Last update: about 7 months ago

During Thursday's parliamentary session, the members of the House of Representatives held a debate on the Opposition's recent motion for the government to launch a public inquiry into the Electrogas deal. PN MPs detailed information which emerged from leaked emails.

While the Opposition accused the PL of covering up serious corrupt dealings which cost the country a lot of money, the government accused the PN of doing the same during their mandate and said that the deal had been approved by then Attorney General Peter Grech and the European Commission.


Among the issues that emerged from this discussion, PN MP Therese Comodini Cachia said that a number of emails were passed onto her relating to communication among Electrogas directors and stakeholders when the deal was being procured. 

On the third anniversary of Daphne Caruana Galizia's murder, it was revealed by the Daphne project from documents passed on to the independent journalist before her murder, that Electrogas stakeholders were paid over €16 million in success/development fees using funds from a government-guaranteed loan given to Electrogas. 

Saying that she will give a small taste of what the public inquiry into this deal could reveal, Comodini Cachia explained that the money that was being given to the stakeholders were addressed as development fees rather than 'success fees', which made them question why this was done.

"The government is asking us why we need an inquiry when the EC reviewed and approved it. The EC only knows what Konrad Mizzi (Energy Minister at that time) let them know," she explained, saying that she has the previously mentioned emails as proof that they never told Oxera (the consultancy firm that was helping the Maltese government in the process of obtaining state aid approval for the project) about the €16 million fees.

The first email she mentioned is dated 12 April 2012 sent by the Electrogas director to other directors saying; "I am planning to send out this email to Oxera and the Maltese government today" and gave a breakdown of capital expenditure of the company. This included a 'pre-production cost' line with €20.20 million allocated to it.

In a reply, an employer from Siemens asked the Electrogas board "in the €20.20 million we have €16.86 million as development fees for the sponsors," the sponsors being the same shareholders for Electrogas. "What shall we tell Oxera about this as it might be overcompensation?" the employer asked.

Comodini Cachia said that in reply to this note of overcompensation, both Electorgas and the Maltese government said nothing back.

"This means that the EU Commission knows nothing of this overcompensation, so they cannot have reviewed everything. Who will the EC blame for the government not telling them the truth? The Maltese population of course as it has to pay for government shortcomings," she stated.

She also presented emails regarding the €40 million in debt that the government forgave Electrogas. An email dated 12 July 2017 states: "Fredrick Azzopardi (former Enemalta Chairman) has to be instructed by Mizzi first." This meant that for Enemalta to bow down and look over the €40million in excise tax duty, they have to get Mizzi to order Azzopardi who, to this day, was refusing to give up this money, she said.

The email continues, "do not concede anything on the billing issue if possible, blame Fredrick that in the case we have to stop liquefied natural gas supply this is also to the disadvantage of Enemalta. Not sure on whether he can risk taking the blame for that."

The final email she presented showed a conversation between one Electorgas director and another, and showed how the director and Fenech had spoken with Konrad Mizzi and Electrogas' CFO that morning, advising not to worry as "the minister is working on solving excise tax issues."

Comodini Cachia explained that these emails are just a select few of that has been passed on to her and they are proof of what a public inquiry could find.

AG report has been ignored for two years

Other PN MPs also spoke including Karol Aquilina and Ryan Callus, who insisted that the AG's report on the matter has been ignored for two years.

"Name one institution that has taken action on this report of shortcomings. Of course, the PM will say that they are working because they are working in his favour. He said that he is satisfied with their work, including on this project. You are laughing in our faces," Aquilina said. "No institutions told us who owned 17 Black, it came from the media."

He said that it is natural to draw the conclusion that the government is scared of the truth.

Callus pointed out that the AG report found that the government bound Malta to paying 85% of the product regardless of how much it uses.

"The cheapest energy project we have is the interconnector, a project by the PN, even the PWSC power station costs less than the Electorgas deal because of this," he said.

We lowered electricity bills and cleaned the air - PL MPs

From their end, PL MPs and Parliamentary Secretaries came together to emphasise that the PL in government fixed the Malta's air pollution problem, which they said the PN left behind them.

Energy Minister Michael Farugia recalled Enemalta's situation in 2013, with €940 million in debt, more liabilities than assets, a power station that was old and damaging to the environment and "scurrying with corruption."

He spoke of the situation with black particles in the air because of the use of heavy fuel oil which were causing respiratory problems. "Pollution, that is what the PN left with their own corruption."

He also accused the last PN government for changing its environmental policy, which was set to reduce pollution by stopping the use of heavy fuel oil, in order for it to fit the tender that PWSC was proposing for its power station in return for €20 million.

On the claims on corruption, Farrugia said that the AG's report confirmed that the project was transparent and confirmed that the proposal tenders were fair and that clarification were made. He also said that if there were shortcomings, they had no effect on the result as the Electrogas deal was advantageous for Enemalta.

PL Whip Glenn Bedingfield echoed Farrugia's comments in his address and called for the Opposition to show their position with the new leaderm rather than making allegations against the government continuously. "What are you going to do? What plan do you have if you want to be in government again? The public wants to know if they will keep enjoying the benefits that we have brought, especially from this deal?"

No speaker found the courage to defend Mizzi - Bernard Grech

In reply to the government's comments, Opposition Leader Bearnard Grech said that the government wants to try and overshadow recent events by speaking about 2013

"But never did they defend this deal. No speaker found the courage to defend Mizzi!"

"Our call for this motion is clear, we want an inquiry that looks into the Electrogas dealings and agreements. We know that there are serious allegations that tie in with the DCG case," he added.

He targeted the PM, saying that he has been in hiding by saying that he was not in Cabinet at the time, but he was consultant of former PM Joseph Muscat and attended cabinet meetings. "You cannot say you didn't know."



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