Last Sunday I outlined how the information on 17 Black indicates criminal motivation behind the power station deal, the plan being to suck out of Maltese coffers as much money as possible.
Of the private consortium involved, I have so far only mentioned German company Siemens and Azerbaijani gas supplier Socar.
I imagine that Socar does not care and nor does it submit itself to the same controls and ethical standards as the rest of us. We know its owners and their history. We know that some time before this deal was struck, the heads of the Maltese government met with the Azeri leadership in private without note-takers, civil servants or press being present.
Siemens, on the other hand, have taken a grave risk with this consortium partnership. I am sure the German authorities will investigate the agreement and the 17 Black information. Why has the company remained silent?
But what about the minister and the Prime Minister’s chief advisor, and the Maltese members of the consortium? One of the partners is directly involved as the owner of 17 Black. The red flags that should have applied to Siemens, the red flags that would have forced lawyers from General Electric (the previous power plant suppliers to the Maltese government) to block the deal had they been invited to join, the same red flags should have and probably did flutter in the offices of the three Maltese consortium partners too.
These are seasoned businessmen and financiers and they do not loosely place their capital at risk. Apart from the guarantee of the Maltese government which reduces their risk, the conditions of the deal are so favourable to them that they are beyond normal business conditions. Something is very smelly – the entire deal stinks of corruption. Are the consortium partners party to it or just innocent businessmen who have fallen prey to political manipulation?
History, police investigations in Germany or an Interpol/ Europol independent investigation will one day disclose the extent of the robbery that Malta and its people appear to have suffered in this energy saga.
With hindsight, the normal course of events would have been the following: first extend the existing 1994 plant, in early 2004-2010, with gas supplied via a pipeline or a gas tanker. Then build the interconnector. In this way Malta would have had a sufficient and much cheaper supply of energy than it has today.
Moreover, this solution would have cost less than one fifth of the price Malta actually paid to purchase the BWSC plants in 2012, the Electrogas plant in 2014 and the supply of gas via Socar in 2015. Malta would have owned a clean, modern plant and would have had the choice of buying from the European grid when the spot price was lower than our costs.
Instead, we have uselessly spent between €500 and €750 million and are burdened with an 18-year obligatory purchase of gas supply that we may not need, at almost twice the price of the gas we could have purchased directly. We would not have needed to have recourse to China to buy out the unnecessary diesel-based BWSC units.
From the evidence so far it would appear that the Maltese Treasury is paying out all these extra monies to foreign and Maltese businessmen who are either making a questionably and abnormally high profit or are paying commissions or advisory service fees, perhaps through accounts we do not know about.
We, the public, the final consumers, are paying electricity at 10 times the rate of Sweden or Belgium and have to keep paying through the nose unless something is done to correct the situation.
The items robbed, and the damage caused to Malta, include the following:
• The millions lost and health damaged due to bad policy decisions: years of heavy fuel power production when the Delimara plant could have been run on gas. The damage is both pecuniary, since gas is cheaper than oil, and moral, since the health of the Maltese people has suffered from air pollution.
• The valuable assets stripped or destroyed to create an artificial need of replacement, with the loss of national investment worth several hundreds of millions. The Delimara power station was mothballed after only 15 years of industrial life when it had another 50 years left.
Absolute silence does not equal absolution, or amnesia
• The unnecessary purchase of a series of small diesel turbines which were later sold to China through the intervention of a Chinese middleman who opened a Panama account at the same time as our minister and chief advisor in the Prime Minister’s office. This resulted from the favouring of certain investors over others, to the detriment of the public, either due to bad decisions or pre-agreed deals.
• And probably the greatest premeditated robbery of all time in Maltese history: the investment in a new Siemens power station by the consortium, through deals whose costs also include a Maltese government bank guarantee, the lease of an over-priced LNG tanker and the long-term, over-priced, supply of gas.
From the very start of the project, the tender process, the choice of suppliers, the long-term gas supply, the leasing and refurbishment of a supply ship, all point to the intention to defraud the Maltese public to the tune of millions.
The latest NAO report and the 17 Black connection between one of the consortium partners and the Panama accounts of the former energy minister and the Prime Minister’s chief of staff are just a few items of evidence that have reached the public eye.
The NAO report is normal for a country that brags about the existence of the Rule of Law. The 17 Black disclosures, the Panama accounts and the incriminating e-mails from the accountancy firm that opened these accounts and acted as adjudicator in the tendering selection process at the start of the gas power station crime, have only reached the public domain through a leak of private company e-mails by an employee of Mossack Fonseca.
This Panama financial services firm has now been disbanded and its founders, directors and many members of its staff are in jail. The world was shocked by the Panama Papers revelations, with prime ministers or ministers resigning or being hounded out. In several countries, many private citizens and companies exposed by their links have been discretely punished and fined by their national tax authorities and police forces.
Our minister has not. Our accountancy firm has not. Our chief advisor has not. Our businessmen involved in this asset stripping and possible bribery – whether fulfilled or not is still unclear – have not.
We, common citizens, whose assets have been plundered, whose energy costs could have been several hundred millions cheaper, are entitled to a correction in the coming years. These crimes against the citizen cannot just be swept under the carpet.
The policy errors and perhaps even collusion with industry by the previous governments were punished through the ballot box. The policy errors and collusion undertaken by the present government and its suppliers have yet to be punished.
The German supplier will soon be investigated by the German authorities, so we can rest assured of justice being done there. The Azeri and Chinese parties will probably only be punished if the Maltese authorities one day wake up. Their own governments will certainly do nothing against these companies. They probably own them.
The Maltese suppliers and government members involved are at present protected. They have a get-out-of-jail-free card offered by the Prime Minister. They are wearing the fig leaf of magisterial inquiries. Whether they are being investigated by the police we do not know.
The police should have investigated when the Panama Papers were leaked, when the gas agreements were signed and when the 17 Black information was released. But here we have absolute silence.
Absolute silence does not equal absolution, or amnesia. In other countries, utterly rotten business transactions, where national assets are plundered in the way described here, are usually questioned, investigated and corrected through fines, imprisonment and obligation to repay the losses to the nation’s coffers.
When will this happen here? Must we have a more obvious smoking gun than the ones we already have, or clearer evidence of premeditated fraud than the circumstantial evidence that any good lawyer, good accountant or good businessman recognises immediately in this flawed deal?
(Concluded)
John Vassallo is a former senior counsel and director for EU Affairs at General Electric, a former vice president, EU Affairs, associate general counsel, Microsoft, and a former ambassador of Malta to the EU.