The gas-fired power station project has been delayed by at least six months, The Sunday Times of Malta has learnt.

This means it will not be possible for Enemalta to start receiving its agreed supplies of electricity and liquefied natural gas (LNG) from the consortium winning the bid before next September.

The government had committed itself to reducing business electricity tariffs on the back of the new power plant, which was supposed to be in operation by March.

Although the government recently admitted it would not deliver the plant on time, it has not said when it is expected to be completed.

Both Prime Minister Joseph Muscat and Energy Minister Konrad Mizzi said they were waiting for the conclusion of discussions with Shanghai Electric, which is in negotiations to buy a stake in Enemalta, together with the BWSC power plant and convert its turbines to work on LNG.

However, senior Enemalta officials told this newspaper that the project is already delayed by a minimum of six months and the extension of talks between the government and Shanghai Electric to take over the BWSC plant could result in further delays.

We don’t know where the money to finance the reduced tariffs will come from

“We are now looking at September 2015 as the earliest date when the new power plant may be commissioned. However, this new date, which the government is very much aware of, is very optimistic,” the sources said. Asked to specify the reason behind the delay, the officials said March 2015 was never a realistic date for such a complicated project.

“Officials from Enemalta and the consortium entrusted with the project have always advised the government that the March 2015 target was not achievable. Now it seems the government has accepted reality.”

The expression of interest issued by Enemalta in April 2013 specifically mentioned March 2015 as the completion date.

However, technical negotiations with the Chinese are still ongoing, while physical work on the Delimara site has not started.

The Sunday Times of Malta is informed that construction of the LNG power turbines – being coordinated by Siemens – has already started.

Though the delay in the project is not expected to have any repercussions on Malta’s power supply – as Enemalta is already capable of producing the necessary electricity – the focus has now shifted to the potential problems the tariff cuts will cause for the government’s finances.

Labour’s original plan hinged on the completion of the power plant by March when the reduced business tariffs will kick in.

The plan stipulated that while for the first year (March 2014-March 2015) the reduction in residential tariffs had to be financed through an upfront payment of €30 million by chosen consortium Electrogas, the reduced rates from March 2015 onwards, including businesses, had to be financed through the reduced cost in production from the new LNG power station. Despite the delay, the government had said businesses would still receive their promised reduction from March, though it failed to explain how they would be financed.

“We don’t know where the money to finance the reduced tariffs from next March will come from. But that is not really our problem,” said a senior Enemalta official.

An Energy Ministry spokesman said: “As already announced by the minister the milestones will be announced once interface discussions between Enemalta, Shanghai Electric Power and Electro Gas Malta are concluded.”