€158 million paid to BWSC, not one cent paid up for 1989 Delimara plant

Despite government's announcement in parliament this week that almost €158 million has already been paid to BWSC for the controversial Delimara power station extension, the repayment of the loans covering the construction of the first Delimara plant in 1989 have not yet started.

Reacting to last week's downgrade by Standard & Poor's, former Nationalist minister Jesmond Mugliett argued that Enemalta's €600 million in debts "are not reflected in the national debt figures" and insisted that the public deserves to be told the truth. "After all, it's the public who is paying."

Mugliett said that over the past five years, consumers have been burdened with utility tariffs which are considered to be amongst the highest within the European Union. 

"Another worrying factor is that those in charge of Enemalta have been doing very little to address the long-term sustainability of the corporation's finances, and the changes to sustainable sources of energy, which would have reduced our dependency on fossil fuels which are so vulnerable to fluctuating high market prices," he said.

Mugliett has flagged a series of issues related to Malta's energy sector, which are set to negatively affect the country's quest to improve its competitiveness.

"Some speak of debts amounting to €600 million, while others believe it is much higher," Mugliett says, adding that a large proportion of these debts go back to the expenses made when the first power station was built in Delimara more than 20 years ago.

"What is worrying is that throughout these years, no plan was made to undertake a loan repayment programme, knowing that all plants needs to be replaced - power stations have a limited design life - and further substantial capital expenditure will always have to be made," he said.

Mugliett also accused Enemalta's heads of doing very little to address the long-term sustainability of the corporation's finances, and the change to sustainable sources of energy which would have reduced dependency on fossil fuels that remain so vulnerable to fluctuating high market prices.

"When I vociferously criticised ARMS Ltd, it was not only because of the bad service given to the public. A new company was set up, with new additional operational expenditure to install a state of the art system for metering and billing, without imposing the risks to revenue generation which the original plans envisaged that the company should take," Mugliett said.

According to Mugliett, Enemalta and Water Services Corporation embarked on a project costing around €80 million which is still not giving cleaner energy and reducing fuel bills, nor is it leading to better finances at Enemalta.

"The restructuring plan should have come before the installation of smart meters, and should have addressed the prioritisation of the various capital expenditures which Enemalta embarked upon and will be embarking upon in the immediate future," Mugliett said, adding that "the reversal in the boiler upgrade project at Delimara speaks volumes about the way capital projects are embarked upon".

"I believe that the energy sector is the single most prominent factor which will impact on our competitiveness in the immediate future. We need to bring all operations within Enemalta to the efficiency levels whereby what is charged to consumers in Malta reflects the true costs of generation and distribution."

In his analysis of Enemalta's immediate needs, the former PN minister said the country had to move away from its dependency on fossil fuels for the generation of electricity. "Sustainable energy generation should be afforded the highest priority in the programme for EU-funded projects in the future.

"The energy problem has impacted our income - there is little space for better compensation for productivity - and our consumption, because the high tariffs are leaving households will less disposable income."

The energy problem has also impacted the profitablity of various commercial enterprises, reducing their capacity for reinvestment. "It is only by giving the energy sector the attention and priority it deserves that we can reduce expenses to households and industry and aspire to improve on our position of being second from last on the income league table in the EU," he said.