PN says taxpayers absorbed risks, not profits in 'secretive' SOCAR side agreement

Government signed a multi-million-euro financial guarantee to enable Electrogas to secure bank financing for its power station project

Joseph Muscat and Konrad Mizzi unveiling the LNG power station
Joseph Muscat and Konrad Mizzi unveiling the LNG power station

The Nationalist Party said that the "secretive” security of supply agreement between the government and SOCAR meant that all the risks in the project were taken by the taxpayers, whilst the profits were reaped by others.

During a press conference on Saturday morning, PN MP and spokesperson for Energy and Enterprise Mark Anthony Sammut condemned the agreement that two weeks ago was published by The Daphne Caruana Galizia Foundation (DCGF). The security of supply agreement was signed by former Energy Minister Konrad Mizzi in 2015.

“The Energy Minister’s (Miriam Dalli) comments that the agreement was terminated and never utilised are incorrect, as without it SOCAR would have never sold electricity to Electrogas,” Sammut said.

He said that government lied in parliament when it said that the security of supply agreement was being discussed with the European Commission.

The agreement published by the DCGF formed part of government’s temporary guarantees given to the Electrogas consortium, pending the European Commission’s analysis of the security of supply agreement and the deals entered into between Enemalta and Electrogas.

This side agreement, including government’s multi-million-euro financial guarantee, enabled Electrogas to secure bank financing for its project while the European Commission analysed the Malta deal to determine whether it breached state aid rules.

“The agreement was not discussed with the Commission but hidden from it. Leaked emails show that they were worried that if the agreement went public, the European Commission would have realised it would have breached the rules.”

Sammut also remarked how a PN parliamentary motion to publish all the agreements related to the Electrogas power station was dropped by government, with all PL MPs voting in favour.

“The Labour Party and Prime Minister Robert Abela knew of all the side agreements, the same way they knew of side agreements in the Sadeen and hospitals concession deals,” Sammut said.

He questioned why PL was still “protecting” and refusing to condemn former Energy Minister Konrad Mizzi, two years after he was sacked from the party.

“Labour has been hiding these details for 10 years and transparency in the sector is much needed. We need to know how the energy subsidies are being spent. How much is actually going towards the consumer and how much is being used to subsidise the profits of Shanghai Electric and Electrogas?” asked Sammut

PN MPs Mark Anthony Sammut (left) and Darren Carabott (Photo:PN)
PN MPs Mark Anthony Sammut (left) and Darren Carabott (Photo:PN)

PN MP and Chair of the Public Accounts Committee Darren Carbott said a scandal that started nine years ago was still being discussed, and that the country was “stuck” because of this.

The PAC is probing the findings of the National Audit Office’s investigation on the Electrogas contract, concluded in 2018. Mizzi had already testified at length in the previous legislature.

“This secret agreement meant that the government decided that a company was needed for the electricity supply and it acted as a guarantee in case the project failed,” Carabott said.

He said that the NAO report on the Electrogas tender concluded that there were serious doubts on how it was awarded, condemning the due diligence that was carried out.

“Despite Electrogas’ financial issued, the contract was still awarded. Why were the tendering process rules broken to accommodate Electrogas? Who advised the government to award them the contract,” Carabott asked.

He concluded by stating that the contract should be terminated.