Konrad Mizzi at PAC: Electrogas agreement was ‘best in class’

Former energy minister Konrad Mizzi continued to defend the Electrogas project during another grilling at the Public Accounts Committee, telling MPs the deal was “best in class”.

“I believe negotiations with Electrogas resulted in a deal that was favourable to Enemalta and the outcomes of reducing electricity rates and shifting power generation to gas were achieved within reasonable timelines,” Mizzi said during a lengthy and surprisingly calm exchange with Nationalist MP Karol Aquilina.

Aquilina asked about €18 million in penalties Electrogas incurred as a result of delays to deliver the project within the agreed timeframe.

Mizzi acknowledged that damages were capped at €18 million and it was agreed that the penalties will be paid at the end of the contract but commercial interest rates will be charged. He added that the period of delay was reduced from the duration of the contract.

Mizzi, who now sits as an independent MP in parliament, insisted that the European Commission had scrutinised the project and found that projected profits were reasonable.

“This agreement is extraordinary and provides best practice in the story of government contracts,” Mizzi said.

PN MP Beppe Fenech Adami asked whether the original agreement allowed for penalties to be paid at the end of the contract period with Mizzi acknowledging that this had changed but so did other aspects, which favoured Enemalta.

Mizzi said during negotiations, the penalties were not waived but it was agreed to have them paid towards the end of the term. “However, they will also have to incur commercial interest rates but other things changed such as the gas supply agreement that was reduced from 18 years to 10 years since government was planning a natural gas pipeline,” he said.

The PN MPs tried to drive home the fact that the tendering process had given importance to the delivery time for the project. The Labour Party had promised an 18-month delivery period and the bidder that did indicate such a delivery period was awarded more points.

Delays minimal

However, Electrogas failed to deliver the project within the timeframe despite promising to adhere to 18 months. The first electricity from the new power station was produced in 2017, more than three years after the tender was awarded.

But Mizzi insisted the delays for such a complex project were minimal, hitting back at the PN MPs by recalling how Mater Dei Hospital was dogged by delays and took more than 10 years to build.

He said that in parallel with the Electrogas project, government had attracted Shanghai Electric Power to buy a one-third stake in Enemalta and purchase the BWSC plant.

“There were complex discussions on different elements that also depended on each other,” Mizzi explained.

He refuted suggestions that the government had engaged with Electrogas before the election and the agreement was a done deal. “It’s a lie,” he insisted.

The PAC grilling was again characterised by pointed exchanges between Mizzi and PN MPs Beppe Fenech Adami and Ryan Callus.

Mizzi accused Callus of skiving from his government job, repeatedly asking him where he worked.

Callus denied the accusation and refused to tell Mizzi which government entity he worked for.

Mizzi also provoked Fenech Adami by claiming that a certain John Debono acts as his frontman in various business deals. The PN MP dismissed the claims.

The PAC is chaired by Fenech Adami and members present included PN MPs Ryan Callus and Karol Aquilina, and PL MPs Carmelo Abela, Oliver Scicluna, Glenn Bedingfield, and Clayton Bartolo.

Mizzi is expected to continue testifying in another sitting next week.
 

Excerpt of exchange between Fenech Adami and Mizzi

Beppe Fenech Adami (BFA): You set an 18-month period for delivery because you engaged with Electrogas before the election.

Konrad Mizzi (KM): It’s a lie that we had engaged with Electrogas… it’s a lie… tell us Beppe Fenech Adami who is John Debono. He is doing your bidding and acting as a frontman for you to pick up the cash on your behalf.

BFA: You’re inventing things. Speak about the power station and the contract not about John Debono.

KM: We reduced electricity bills and closed Marsa power station.

BFA: You are under investigation by the police… you cannot even go to America…

KM: John Debono your assistant… you encouraged him to contest Attard. He was involved in Elcom (the PN electoral office) and he destroyed it, and his job now is to destroy Adrian Delia.