Government has made the decision to freeze several infrastructural projects which were to be entirely financed by national funds, as the country continues to face increasing energy prices, Times of Malta reported on Sunday.

Top civil servants have said that the decision could impact certain planned road upgrades, schools and other projects.

The decision also entails those large investments such as the new ITS project near Smart City, among others, are expected to be given less importance, along with headline projects announced before the March general election.

Projects which have already started and those which are partially funded by the EU’s Recovery and Resilience Facility and European Regional Development Fund will not be impacted, the newspaper reported.

Finance Minister Clyde Caruana informed all permanent secretaries of this decision during a meeting last Wednesday.

Sources told the newspaper that Caruana’s clear message was that no more money can be allocated for projects which are 100% allocated from the national budget, otherwise energy bills will increase significantly.

They said that for every €1 that is spent on state-funded projects, a €1 will have to be cut from another part of the national budget. These projects have no fixed start date, and the decision would save government “hundreds of millions of euros” which can be redirected towards the energy crisis.

The Maltese government has opted to absorb the additional costs of skyrocketing energy bills which has had an effect across the EU. Government is trying to skim €200 million off its expenditure to create an emergency fund to cover the rising cost of energy.

Energy Minister Miriam Dalli said that current government subsidies are keeping prices stable at pre-pandemic levels, with Malta currently having the third cheapest electricity prices in Europe, a recent study showed.

Ministries have also been ordered to cut down on administrative costs, Times of Malta reported.

Sources at Enemalta said that subsidies could cost government up to €400 million in 2023. Details on how government plans to finance the growing costly price have been scarce, it was reported.