The government has published long-awaited contracts with the Electogas consortium for the building of the new gas-fired power station in Delimara and the provision of power to Enemalta for the next 18 years. The Nationalist Party immediately criticised the government for blanking out parts of the contracts.
Contracts regarding the BWSC plant (sold to Shanghai Electric) and its conversion to gas, as well as ban guarantees, are to be published tomorrow.
Officials from the Office of the Prime Minister led by Ronald Mizzi, permanent secretary and officials from Camilleri Preziosi law firm briefed reporters prior to the publication of eight contracts with Electrogas.
They regulate the Delimara site lease, power station design, construction, operation and performance, termination and post-termination stages. The contracts cover 18 years starting when the new plant is commissioned. One contract covers the supply of gas, its specifications and storage while another covers the supply of power to the grid.
Through this agreement Enemalta imposed a set of minimum function specifications for gas and for power. An independent engineer was jointly appointed to oversee these specifications.
The contracts say that key contractors cannot be changed without Enemalta's consent. There are also a number of reporting obligations by Electrogas to Enemalta during the construction phase.
As for LNG, there are obligations on Electrogas on dispatch and minimum stock requirements. Gas must be up to certain specification. If it is of a lower specification, Enemalta may accept it for a lower price.
There are opt-out clauses for termination of the gas supply agreement should a pipeline be in place. No details were given.
POWER PURCHASE AGREEMENT
The third contract is the power purchase agreement which regulates the rate at which Electrogas sells electricity to Enemalta.
Electricity rates have been fixed for five years, and "indexed" for the remainder of the term. No details were given for "commercial reasons".
No details were given about penalties for delays in the commissioning of the new power station.
The contracts on the former BWSC plant also cover operations, fuel supply, operations, site services agreement, electricity connections and power purchase.
Lawyer Ronald Galea Cavallazzi said "commercially sensitive" information would be redacted from the agreement when it is published, including circumstances under which one of the parties may terminate the contract. He said that if such information was public it could be abused.
Enemalta chairman Frederick Azzopardi said the minimum power which Enemalta will be obliged to buy from the two plants cannot be divulged.
He said, however, that it did not appear that power tariffs would need to be raised up to 2020.
The price of electricity after the initial five-year term of the power purchase agreement will vary according to a particular index on the stock exchange, which was not named.
PN: IMPORTANT SECTIONS KEPT SECRET
In a reaction, the Nationalist Party hit out at the government for keeping secret the rates with which Enemalta will buy electricity from Electrogas.
The government was boasting about having published the contracts, when the most important elements had been kept secret, it said.
The power purchase rates were obscene because they were double the price at which Enemalta bought power through the interconnector. The people deserved to know how much they were being robbed by paying higher bills than they should, the PN said.
PARLIAMENTARY DEBATE ON THURSDAY
When Parliament met this evening, Opposition deputy leader Mario de Marco noted that the House on Thursday morning is due to hold a debate on the power station.
He called for the debate to be postponed for some days so that all MPs could study the contracts published today and those due to be published tomorrow.
Prime Minister Joseph Muscat said a postponement was not possible for logistical reasons.
He said the government was acting correctly, as it could have easily put off the publication of the contracts until after the debate.
Furthermore, the opposition motion for the debate was redundant in that the motion actually called for publication of the contracts, and that was now being done.
Dr de Marco said the motion was not redundant as important parts of the contract had been blanketed out and the opposition was calling for their publication.
If the government wanted a proper, informed debate, then the debate should be postponed for a few days so that the contracts could be studied.
Dr Muscat suggested that the opposition drop its motion, - since it was calling for publication of the contracts. Once that motion was dropped, a six-hour debate could be held on some future date.
Dr de Marco said it was not fair to require the opposition to drop its motion. What the opposition was seeking was a postponement of a few days, possibly a week, because these were voluminous and technical contracts which had to be studied. contracts having hundreds of pages.
Opposition motion Simon Busuttil said the motion did not just call for publication of the contracts. This was a two-year-old motion which had some 12 points. He suggested the debate could be held on Wednesday, when a vote is due on other laws and MPs would therefore be in the House.
Dr Muscat said the government could have acted underhand and published the contracts on Thursday itself. He insisted that as agreed, the debate should be held this Thursday.