If there ever was a case of putting party before country, this was when Joseph Muscat disallowed Konrad Mizzi from being Labour deputy leader but deemed him fit to remain a minister despite the Panama Papers scandal. The Maltese citizen had to accept what the Labour Party rejected.
Mizzi was protected by Muscat in subsequent controversies involving controversial privatisation deals in which the former was directly involved. Indeed, they were subsequently handed over to other ministers who had to face public scrutiny: Chris Fearne in the case of the sale of public hospitals to Vitals and Joe Mizzi in the case of the ARMS energy bills controversy.
In reality, ARMS is a state-owned company, however, its operations are directly related to Enemalta, which has been privatised and which buys its energy supply from Azerbaijan.
Let us break this down in pieces. In Malta, the purchase, distribution and sale of energy are dominated by state monopolies. The lack of transparency on energy bills indicates abuse of monopolistic position to the detriment of consumers.
By now, many consumers are noticing that their energy bills are a far cry from what was promised by Mizzi prior to the 2013 and 2017 general elections.
Consumers are noticing that their energy bills are a far cry from what was promised by Konrad Mizzi prior to the 2013 and 2017 elections
Consumers are realising that they are incurring high rates because of the billing system by ARMS. There is even a court case about this. Actual bills are being issued every two months and ARMS is rationing the quota, thus resulting in higher bills.
In practice, this means that if, for example, one uses a heater or an air conditioner in certain months but does not use them in subsequent months during a year, the lower consumption in certain months does not compensate for the higher consumption in others.
During a two-month period one easily runs out of quotas and cheap rates, which have been apportioned by ARMS: if your consumption exceeds the quota in two months you will incur very high rates but if you under-consume your quota in the subsequent two months you will lose it. I never heard Mizzi promise this system.
The public was therefore given a false political promise. Instead of cheaper utility bills, many are experiencing lack of price clarity and price hikes in certain months. In turn, this is resulting in illicit revenues for a state monopoly.
The matter gets worse. The Daphne Project has confirmed what was written by Maltese journalists in the past years, namely that Malta is subsidising Azerbaijan in the consumption of gas, which fuels the new Electrogas power station.
The Labour government had signed a €1 billion, 10-year deal to import all liquefied natural gas (LNG) needed to supply the power station from Azerbaijan’s state-owned Socar company.
Between 2015 and March 2018, Malta paid at least €131 million for the gas – almost double the price of open market rates. Hardly surprising, when a monopoly owned by a government facing corruption allegations buys energy from a company owned by another government also accused of corruption.
In the first year of the deal, Socar paid Shell, from which it buys the gas, $40 million less than what it had charged Malta for the same fuel. Baku enjoyed this bargain at the expense of energy consumers in Malta who are now wondering why the energy bills are not as cheap as promised.
In practice, therefore, Enemalta is passing the buck of higher energy costs to Maltese consumers and Mizzi has passed the political buck of this controversy to a new energy minister. The latter looked bewildered when asked by the press about this and he has the unenviable position of dealing with a mess concocted by the triumvirate in power.
Fearne is in a similar situation with regard to the hospital privatisation mess.
Who will the buck be passed on to if Mizzi creates another mess at Air Malta?