So now we have it: the 2015 secret agreement signed by Konrad Mizzi, then energy minister, promising Azerbaijan’s SOCAR Trading that our money would cover any debts that couldn’t be paid by Electrogas, the consortium chosen to build the Tagħna Lkoll power station.
It turns out the risks were all ours – just as the Tagħna Lkoll slogan promised. But the profits – on gas bought at inflated prices – remained theirs.
Eventually, the risks amounted to €432 million guaranteed by government to Bank of Valletta (up from an initial €88 million) plus this blank cheque. No wonder it was kept secret from everyone.
We’ve known about its existence since 2018, when David Casa MEP published a leaked FIAU report that noted the disturbing fact that Mizzi was a signatory in an agreement that was, in principle, between Electrogas and SOCAR.
In 2020, The Shift News analysed internal Electrogas e-mails, leaked to Daphne Caruana Galizia, which kept referring to this agreement: how it might violate EU law on state aid and why it was therefore giving international lenders the jitters. If the EU decided that Mizzi’s guarantee was invalid, the lenders would be caught in the fallout.
Following The Shift’s report, the Daphne Caruana Galizia Foundation began a protracted battle to obtain this agreement. The government resisted. The foundation has now won the legal battle.
Does seeing the agreement make a difference, given many of us have known about it? Oh yes.
Up till now, the government had not acknowledged an agreement of this kind. Seeing is believing. Anyone who scoffed that an agreement, on such terms, was signed, needs to come to terms with it.
The next step, of course, will be to deny its importance. Yet, it had to be super important for the government to cover its tracks the way it did. It hid the agreement from parliament, the Chamber of Commerce (which had asked to know its terms), the lenders and the commission.
To hide it, Mizzi was prepared to mislead parliament. This week, the opposition accused him of lying in 2015 when, in response to a parliamentary question by Marthese Portelli (PN) about the agreement, he said that the commission was studying it.
The opposition seems to have overlooked the second time he misled the house. In 2017, the opposition moved a motion (252) demanding that all relevant agreements be presented, including the guarantee. Mizzi countered with an amendment stating that the guarantee had been scrutinised by the commission as had the security of supply agreement.
Now we know that, too, was misleading. But it was Mizzi’s counter-motion that passed in the house on March 1, 2017. Which meant that he got his fellow Labour MPs to vote for a lie, including the current President of the Republic.
If there’s anyone who should be frothing at the mouth, it’s Mizzi’s former colleagues on the government benches. They should be the ones baying for him to be hauled back before the Parliamentary Accounts Committee and explain himself.
Konrad Mizzi got his fellow Labour MPs to vote for a lie, including the current President of the Republic- Ranier Fsadni
He made fools of them all, including Evarist Bartolo, the former foreign minister now dispensing public advice on how to save the nation’s future. If even he, in retirement, won’t speak up about the damage this agreement will do to Malta’s reputation as a strategic partner, anything else he says will sound hollow.
Just how much did this agreement stink? The stench rose to the heavens. The government was afraid of revealing it to the lenders over a secure website (the normal procedure for confidential documents of commercial sensitivity). The lenders insisted. Finally, after 20 months, they were permitted to view it in person – through two legal experts on state aid – in Switzerland, a stratagem so expensive it cost Electrogas €10,000.
What the lawyers saw confirmed their fears. They advised no further money to be lent till the agreement was cancelled. It was terminated on December 7, 2017.
Caruana Galizia, who had the e-mails showing the lenders’ jitters, was assassinated less than two months earlier. Let’s hope it was pure coincidence.
Surely, however, an assassination apart, all’s well that ends well? We didn’t have to cough up for anything other than overpriced gas.
Thing is, it hasn’t ended. The US government has called this deal corrupt and banned Keith Schembri and Mizzi from entering the US. Will it take further steps?
The commission has to decide whether the agreement was illegal, after all, and whether it should be unravelled. The political circumstances – the Ukraine war and soaring energy prices – might weigh heavily on the commission, which could then decide not to take action.
With our reputation on the line – again – the publication of this agreement isn’t just about confirming what happened in the past and the bullet we dodged. Publication has put our reputation in the spotlight in the present.
Silence from the government – let alone collusion to protect Mizzi from questions by the Parliamentary Accounts Committee – would be compromising. No objections and no action mean that the government sees no scandal.
That attitude will help the government survive the headlines. But our reputation in Europe will take another heavy blow. By now, we should know that always comes at a steep price.