Updated: Cost of gas pipeline rises to at least €231 million - PL spokesmen

The cost of a gas pipeline between Malta and Sicily rose from €93 million in 2003, when Leni was asked to give the country a quotation, to at least €231 million today, Labour spokesmen Evarist Bartolo and Joe Mizzi told a news conference this afternoon.

Speaking at Delimara, Mr Bartolo said that back in 1999, then minister Josef Bonnici had said that the government was studying the possibility for a gas pipeline between Malta and Sicily to run both power stations on gas.

He had said this would be the best present Malta could get for the millennium.

Mr Bartolo said that an internal Enemalta dossier of 2008 had said that Malta's main weakness in the energy sector was a lack of sufficient investment in infrastructure.

This report had identified the use of a combined cycle gas turbine as the only method compliant with the 2020 emissions target.

But as the government had taken its time to act, the cost of the pipeline which in 2003 Leni had estimated would cost Lm40 million (€93 million) rose to €117 million by 2006 and to at least €231 million now.

When Prime Minister Lawrence Gonzi was two years ago asked how much would the conversion to gas cost, he had said it would not cost anything.

But according to a report by Gordon Cordina, this would cost at least €35 million.

This was when the contract with BWSC stated that it would cost €27 million.

Another issue was the waste that would be generated by heavy fuel oil.

Which could would accept this waste and how much would this cost the country, they asked.

FINANCE MINISTRY'S REACTION

In a reaction, the Finance Ministry said that since the energy generation plan was prepared in 2006, technology had evolved immensely and what had not been available then could now be used.

So it was no longer the case that it was only gas plants which could achieve EU acceptable emission levels.

This was so much so that there were now coal operated plans which, using modern technology, could reach these limits.

The ministry said that when the Delimara extension tender was prepared and published in 2007, it had clearly declared that gas was not available and that for adjudication purposes only, one had to assume that gas would be available in 2015 and that the expense for the plant’s conversion to gas had to be made in that year.

The expense quoted for the conversion of the new extension was €27 million while €35 million were needed for the conversion of the existing plant.

This was apart from the infrastructure expense needed to import gas.

The government’s policy until recently was that the expense for such investment in infrastructure was prohibitive.

However, when the EU earlier this year agreed to consider European funding for projects in countries physically cut off from the European mainland, the government again started to consider this investment.

In its argument about the increase in the expense needed for the gas pipeline, the opposition failed to consider that even the price of oil had increased substantially.

Investing in a pipeline when the cost of oil was much lower had not been viable.