Last week set out the balance sheet inherited in 2007: a corporation with negative operating cash flow, rising debt, and a legal countdown on its oldest power station. This week: how it got there. The answer is a decade in which Malta, having built, stopped.
Be precise about the record, because the political shorthand on both sides distorts it. It is not true that nothing was ever built. Delimara Power Station came on line in the early 1990s, a combined cycle plant followed late that decade, and the network was extended as the country grew. What is true - and what the investment numbers prove - is that after the mid-1990s capital investment fell by more than half and stayed there, while investment in generation became minimal from 2000. Roughly €42 million a year between 1995 and 1997 became roughly €16 million a year thereafter. For a utility facing 3% annual demand growth, 1960s plant and known EU environmental constraints, that was not consolidation. It was abdication by instalments.
The lazy version of this argument should be resisted. The lost decade was not the work of stupid people. It was the work of rational people responding to the incentives in front of them, inside a structure that punished foresight and rewarded deferral. A new plant is enormously expensive, disruptive to procure, contested in planning, and invisible to voters when it works. Deferring it costs nothing before the next election. Tariffs held below cost are felt by every household immediately; the debt they generate is felt by no one identifiable until it becomes everyone's problem at once. Fifteen years of rational choices produced a collectively irrational outcome.
The Corporation's own tradition reinforced the drift. Enemalta had developed a formidable engineering culture, reflected in much of its senior leadership. Keeping the B Station at Marsa alive was an extraordinary feat of operational engineering. Three 30 MW turbines were acquired second-hand from Palermo between 1982 and 1985, dismantled there and reassembled at Marsa by Enemalta and Malta Drydocks workers. A fourth, much larger 60 MW turbine was acquired second-hand from Little Barford power station in the United Kingdom in 1987. A culture capable of that deserves respect. But it was built to keep the plant running, not to ask whether the plant should exist.
Operational brilliance filled the space where strategy should have been. Strategic planning had become subordinate to the immediate demands of keeping the system running. Business planning was, in essence, a financing schedule. The Electricity Supply Regulations were unfit for what was coming. Human resources ran on a pre-1988 public service grading structure encrusted with side agreements. An organisation like that struggles to develop long-term investment cases and then fight for them against competing demands. It administers the present.
Movement came in 2004, when responsibility for the sector was assigned to a minister with the strategic foresight to recognise that Enemalta could no longer be managed simply as an operating utility, and the chairmanship passed to an engineer who understood transformation rather than maintenance alone. The direction began to shift from keeping the existing system running to confronting the structural problems that had accumulated over the previous decade. But much of the time available to do that had already been lost.
EU accession brought those accumulated failures up against a hard deadline. Under the Large Combustion Plant Directive, Marsa's generating units were limited to 20,000 operating hours from 1 January 2008, with final closure no later than 2015. No one was ambushed. The directive dated from 2001, the obligation was known throughout the accession process, and the Generation Plan 2006-2015 set out the position plainly. Yet procurement of replacement capacity started only in 2006. GN/DPS 8/2006 began with a Request for Proposals, followed by the Invitation to Tender. Final bids closed in March 2008 - after the 20,000-hour clock had already started.
The evaluation continued for another year. Enemalta's recommendation went before the General Contracts Committee at the Department of Contracts in early 2009. The award was published on 3 April and the contract for the 144 MW Delimara extension signed on 26 May. By then this was no longer long-term generation planning. Malta was procuring replacement capacity while the remaining operating life of Marsa was already being consumed. It had become a race against the Corporation's own scrapyard.
And a race changes everything about how decisions get taken. When procurement has slack, there is room for iteration. When it runs against a decommissioning deadline, with demand rising and reserve margins thinning, every month matters. Old plant must be run harder, maintenance becomes more difficult to schedule, and operating margins tighten. The procurement had started at the end of more than a decade of deferred investment; by the time the contract was signed, another three years had passed. The procurement did not create the pressure. It was inherited from the decisions deferred before it.
There is a lesson here that sits above the political argument. When the 2023 and 2026 outages happened, the sitting Government pointed to inherited weaknesses in the system, while the Opposition pointed to investment and planning failures under the present administration. Both arguments form part of the record; the latter ledger comes later in this series. But the deep lesson of 1994-2006 is not about either party. It is that Malta needs mechanisms that force energy investment decisions to be taken when they are cheap rather than when they become unavoidable.
The 2024 National Audit Office report makes the comparison uncomfortable. It found that Enemalta's technical reinforcement proposals were based on what the Corporation could realistically carry out with the resources available, rather than simply on what the network required. It also found that Enemalta had failed to publish its Network Development Plans and submit them to the regulator as required by law.
Different decade. Different circumstances. The lost decade's method, alive and well: allowing what can be done today to determine what is planned for tomorrow.
David Spiteri Gingell is a Governance, Institutional, and Digital Transformation Consultant