Fenech’s Shell settlement done without Enemalta consultation
€5 million payment took place during the electoral campaign without any consultation with the Enemalta board
A decision by former finance minister to settle a court dispute with Shell with a €5 million tax-free payment was taken without any consultation with state energy corporation Enemalta, MaltaToday is reliably informed.
The out-of-court settlement happened days after MaltaToday broke the story of underhand commissions paid by commodities giant Trafigura to a former Enemalta consultant, back in 2004.
But the €5 million payment, which took place during the electoral campaign, was carried out without any consultation with the Enemalta board, which was a party to the original litigation.
Shell had complained in 2004 that aviation fuel was supplied by the state-owned company Enemalta, which also owned the storage facilities of oil at the Mediterranean Oil Bunkering Corporation (MOBC); but that Enemalta had prevented it from doing this through "uncompetitive measures".
Following the liberalisation of the market, Shell had tried to start distributing fuel but it claimed that Enemalta was preventing it through uncompetitive measures to carry on with its business.
The company found no joy from the Malta Resources Authority, to whom it referred its first complaint. Instead of issuing a decision, the MRA directed both parties "to negotiate in good faith to arrive at a mutually agreeable fair cost-based charge for the services".
Shell appealed the decision, and the MRA appeals board ruled the original decision to be null and void, and that the authority should review Shell's original complaint. But the MRA and government failed to act on the appeals board's decision, and Shell commenced legal procedures.
In 2011, the European Commission decided to refer Malta to the European Court of Justice for breaching EU rules on fuel ground handling services at Malta International Airport.
The EC had issued various warnings over the past years, claiming that the incorrect application of fuel liberalization rules could lead to additional costs to airlines and their passengers.
According to EU rules, the ground handling services market at airports is to be open to competition, including the checking in of passengers, handling of baggage and refuelling of aircraft.
Malta can limit the market to a maximum number of suppliers for, specifically, ramp handling, baggage handling, freight and mail handling, and fuel and oil handling.
But this also comes with certain conditions, particularly that there must be a transparent and non-discriminatory European call for tender. In addition, suppliers who carry out other activities in addition to ground handling services are required to ensure separation of accounts, which the EC said Enemalta was not.