MEP questions legality of Malta’s power station plans

Government's plans to build a new power station within two years may fall foul of EU laws governing public procurement and environmental standards, if queries raised by a member of the European Parliament are heeded by the Commission.

In a written parliamentary question submitted on May 15, Jean-Pierre Audy, of the European People's Party, flagged possible transparency concerns in the call for tenders for a power station complex that is intended to be fully operational by March 2015.

"The Government of the Republic of Malta, acting through a public entity, Enemalta Corporation, has published a call for expressions of interest and energy supply capacity information," Audy observed.

"It would seem that Enemalta Corporation has decided, for this purpose, to follow a procedure about which there are transparency concerns, in particular regarding the application of EU public procurement rules. The submission deadline was 10 May 2013. According to my information, this project will require a regasification plant, gas storage tanks and a 200 MW power generating unit to be built. Furthermore, the specifications seem to overlook environmental and safety issues. Commissioning is scheduled for 31 March 2015."

Audy queried whether the Commission had been consulted over this project, and whether the process followed by the Maltese government - including in particular the specifications and the contract award procedures - is in compliance with community law.

The government's energy plans were a key factor in Labour leader Joseph Muscat's electoral campaign, much of which hinged on popular disgruntlement at the rising costs of electricity and the widespread perception of corruption in Enemalta's former fuel procurement arrangements.

Energy minister Konrad Mizzi unveiled a plan to reduce the price of electricity from the current 18 cents per unit to 9.6 cents per unit, which depends on three factors: the conversion of the present BWSC plant to natural gas (LNG); the electricity interconnector which is already being developed between Malta and Sicily; and the construction of a privately-owned 200MW gas-fired plant.

According to the terms of the contract, a private company would have to fork out €142 million to finance a gas storage facility that will enable Malta to import gas from ships, and invest €166 million in a new gas-fired plant which will be contractually bound to sell 200MW of electricity at a set price for 10 years.

On its part, the Maltese government will be contractually bound to buy 40% of its energy needs from a private operator for the next 25 years.

Prime Minister Joseph Muscat is on record affirming that he will resign if these conditions are not met within the stipulated time-frame of two years.