Updated 6.25pm
The finance ministry's former top civil servant has recalled having reservations about guaranteeing the Electrogas project using taxpayer millions and said he has no regrets about "going overboard" in ensuring safeguards concerning it.
Alfred Camilleri, who was the finance ministry's permanent secretary when the Electrogas consortium was awarded a contract to build and operate a gas-fired power station in Delimara, was testifying before parliament's Public Accounts Committee on Tuesday.
Camilleri said he had reservations about issuing the guarantee because it was not usual for the government to issue guarantees for private entities, rather than public ones.
He acknowledged that he "went a little bit overboard" in imposing safeguards to protect the public purse. But that was for the best, he said.
"I don't regret it however, and nobody stopped me because we knew it was ultimately in the country's best interest," he said.
Camilleri was testifying before the PAC as government and opposition MPs reconvened during parliament's summer recess to continue a series of hearings over the Auditor General's report into the controversial Electrogas deal.
Camilleri said he did not oversee the power station tendering process and was not involved in the Electrogas project, since it was run almost entirely by the Energy Ministry.
He also said he would almost never attend any meetings related to the Electrogas project. Nor was he present for cabinet meetings in which the matter was discussed.
He was only involved in issuing government guarantees, the first of which was issued in 2014. Back then, the government issued a bank guarantee of €88 million over a €110 million interim bridge loan that Electrogas took from Bank of Valletta.
The move was significant because it was the first time such a guarantee had been issued for a private entity rather than another government entity.
The guarantee then skyrocketed in 2015, when Electrogas took a €450 million loan, for which the government issued a guarantee of €360 million - 80 per cent of the loan.
The bridge loans were granted until permanent funding for the project became available to the Electrogas consortium.
In 2017, Times of Malta had reported that Camilleri raised concerns internally when banks had notified him of a serious default by Electrogas under the terms of a €450 million loan agreement - a default which could have cost the government millions of euros but that eventually was cleared without consequences for the state.
On Tuesday, Camilleri told members of the PAC that the government ultimately did not need to pay up any guarantees. It ultimately also earned over €11 million in premium fees for having stuck its neck out for Electrogas, he said.
"Any guarantee poses a risk to the government, but the real risk of a guarantee does not lie in how large the sum is, but to whom you issue the guarantee," he told MPs.
The Electrogas deal was the subject of a 500-page report by the National Audit Office which found a number of shortcomings in the selection process for that project and concluded that the due diligence process was “insufficient”, among other things.
PAC chairman Darren Carabott and fellow PN MPs also asked Camilleri why Electrogas, which was bound to pay €40m in excise duty according to the tender’s terms, had those fees absorbed by government in the form of reimbursements by Enemalta.
Pressed by MPs, Camilleri admitted the excise duty was ultimately paid from taxpayer money.
Camilleri served as the finance ministry's permanent secretary for 16 years, from 2006 till June last year when he retired - spanning a career during which he worked under both Nationalist and Labour administrations.
PAC MPs have agreed to meet next on August 29, when former prime minister Joseph Muscat will be asked to testify for the fourth time.
Correction August 8, 2023: A previous version misquoted Camilleri. He said he had "no regrets" about imposing safeguards to protect taxpayers regarding the guarantee, not about the guarantee itself.