Updated 4.45pm
Joseph Muscat has denied ever discussing plans to build a gas-fired power station with the business people behind the Electrogas consortium that would go on to win the multi-million euro project.
In a two-hour testimony to parliament’s Public Accounts Committee, Muscat also said that his former minister Konrad Mizzi "could have been more transparent" and insisted former finance minister Edward Scicluna had been "misquoted" when speaking about a kitchen cabinet that pulled the strings behind the scenes.
The former prime minister acknowledged that he had met with Paul Apap Bologna and the Fenech family before the 2013 general election, but insisted those meetings never touched on what would go on to be the Labour Party’s flagship project.
Apap Bologna was keen to discuss medicines shortages, he said, while George Fenech – Yorgen Fenech’s father – was eager to know what a Labour government intended to do with Arriva, the bus service that the Fenech family had a stake in.
Those two are both shareholders in the Electrogas consortium that was awarded a contract in 2015 to build and operate an LNG power station in Delimara. Yorgen Fenech has since been charged with complicity in the murder of journalist Daphne Caruana Galizia, who was probing the deal at the time of her assassination.
Muscat made one passing reference to Caruana Galizia's murder and Fenech's alleged involvement in it.
“I’m not here to defend anything or anyone,” he said. “I paid the highest political price, I had to resign. Justice will take its course.”
Muscat's pledge to build a new power station and slash energy bills served as the cornerstone of his 2013 electoral campaign, which swept Labour to power with a record majority.
Yet, Muscat insisted on Tuesday that he kept his distance from the project and categorically denied having ever discussed it with investors before its tendering process was concluded.
The only talk of it he entertained was from foreign envoys or ambassadors who were keen to lobby for companies from their respective countries to be considered, he said.
"I did not meet, send anyone or welcome anyone to discuss this project," after the 2013 election, he told the PAC.
A Memorandum of Understanding that the Labour Party had signed with a private company before the 2013 election went nowhere, as the company was excluded from the tendering shortlist, he noted.
The former prime minister was the latest high-profile person to testify before the committee about the scandal-wracked Electrogas deal, which a 2018 National Audit Office report had probed.
Other members of Muscat’s cabinet, including former finance minister Edward Scicluna, have insisted they were not involved in decision-making on the deal.
Muscat is the most high-profile in a long list of witnesses including Fenech, ex-energy minister Konrad Mizzi and former chief of staff Keith Schembri. The latter pair are both subject to a US travel ban due to their involvement in the "corrupt scheme" leading to the contract.
Muscat: Shortcomings were 'administrative'
The 2018 NAO report found “multiple instances of non-compliance" in the Electrogas bid that was awarded the project.
But in Muscat’s reading, those shortcomings were purely of an “administrative” nature and did not condition the final tendering decision. The NAO, he told MPs, had concluded that the tendering process did not favour any particular bidder.
The former PM kicked off his PAC appearance with a 40-minute statement in which he offered background information about the decision to invest in a gas-fired power station, took a couple of digs at his predecessor Lawrence Gonzi and talked up his government’s success in slashing utility bills for consumers.
Muscat, who is expected to continue testifying before the PAC next week, also said that:
- Konrad Mizzi “could have been more transparent” but he was a stellar project manager and the most competent person to handle the power station project.
- Edward Scicluna had been “misquoted” when he said Muscat had his own little “kitchen cabinet”.
- It was then-Labour MP Joe Debono Grech who encouraged him to engage with Azerbaijan.
- An unnamed PN MP had approached him before the 2013 general election with plans for a gas-fired power station, after having become frustrated with the lack of interest by the Nationalist Party.
LIVE BLOG
PAC session ends
4.04pm Time has run out, and the PAC session is adjourned to next week. Muscat is not done yet - he will be back next Tuesday. And so will we.
Thank you for having joined us today. We'll have a summary of the key points from Muscat's two-hour testimony available at the top of the article soon.
Edward Scicluna 'was misquoted'
4.03pm The final question of the day concerns Edward Scicluna, the former finance minister who testified in court that Muscat had a "kitchen cabinet" of confidantes.
Not so, says Muscat.
"Edward Scicluna was totally misquoted. I did not have a group that was close to me. I had many groups that were close to me on different topics," Muscat says.
Konrad Mizzi 'could have been more transparent'
4pm As the session draws to a close, Muscat acknowledges that Konrad Mizzi "could have worked better".
"He could have been more transparent in the way he worked and explained things. I tell him this, as a friend. He could have acted in a wiser way."
PN MPs want details, but Muscat is reluctant.
Is he speaking about the Panama Papers, he is asked.
"U mhux ovvja, [Isn't it obvious?]" he replies.
An introduction to Konrad Mizzi
3.52pm Joseph Muscat says he was introduced to Konrad Mizzi through Mizzi’s father, who he knew previously. He was the person who introduced Mizzi to Keith Schembri, though he cannot recall when that happened.
Joseph Muscat and Konrad Mizzi in 2014.Why did Muscat select Konrad Mizzi as Energy Minister?
3.50pm “Because he was the most competent person in that sector,” Muscat says.
Cutajar notes that, a couple of years later, Mizzi was made Health Minister. So was he the most competent person in that sector, too?
Muscat: “Konrad Mizzi’s greatest strength is in project management. And that was the main issue. When I saw things were moving well in the energy field, I moved him to health. And Chris Fearne continued where he left off and did very well.”
Muscat notes that when he made Mizzi Tourism Minister, he also put him in charge of Projects Malta, to play to his strengths.
Information given to Yorgen Fenech
3.45pm Carabott makes reference to a 2021 Times of Malta report which revealed that confidential documents concerning Konrad Mizzi projects were leaked to Yorgen Fenech.
Muscat says he believes the Electrogas tender had already been awarded by then. He says he sees nothing unusual about the government exchanging information with a selected partner, once no bids are at stake.
David Galea's dual role
3.40pm Robert Cutajar asks if anyone involved in the energy plan pre-2013 was employed by Enemalta. Muscat says the only person he can think of was David Galea.
Carabott pushes him on this point – “so Galea was a consultant for Enemalta while giving advice to the Labour Party?”
Muscat says he does not believe there was any breach of confidentiality.
Where did the FSU idea come from?
3.35pm Carabott asks who decided on the idea of having an LNG tanker. Muscat says it definitely was not cabinet. He suspects it was Enemalta, but he cannot say for sure.
The Floating Storage Unit used to supply LNG to the Electrogas power station. Photo: Chris Sant FournierNo meetings after 2013 electoral victory
3.32pm Muscat says he also did not hold meetings about the project after the 2013 electoral victory – nor did anyone attend meetings in his name.
"I did not meet, send anyone or welcome anyone to discuss this project," he says. The closest thing was when foreign envoys or ambassadors would lobby, during meetings with him, for Malta to consider a company from their country, he says.
Muscat's meetings with Apap Bologna and Fenech
3.28pm Darren Carabott asks about meetings before 2013.
Muscat says he never discussed the power station project with anyone.
Electrogas shareholder Paul Apap Bologna, for instance, would discuss medicines shortages with him – never the power station plan, Muscat say [Apap Bologna had pitched a similar project to the PN, we revealed in 2020].
Muscat says that when he met with the Fenech family, meetings would be with George Fenech and their focus was on the Arriva bus service. The Fenech family had invested in that and wanted to know what the government planned to do.
The PPP lightbulb
3.23pm Muscat says he and Konrad Mizzi were the two people who worked most on the project. Muscat says he and Mizzi came up with the idea of creating a private-public partnership to bring it to fruition.
David Galea – an energy consultant who helped the PL draw up its energy plans and was also one of the Electrogas bid evaluators – provided technical advice when needed, he says.
Joe Debono Grech and the Baku connection
3.16pm Muscat says it was then-Labour MP Joe Debono Grech who argued that Malta should partner with Azerbaijan on the project. Time has proven him right, Muscat says, noting that now even the EU Commission President Ursula Von der Leyen is wined and dined in Baku.
Debono Grech was among Council of Europe members probed for having received gifts during a visit to Azerbaijan.
Labour members find their voice
3.12pm This probe has been going on for years, and Labour members of the committee have, by and large, sat glumly silent throughout the hearings, save for discussions concerning votes to be taken.
Today, they are far more animated. Only Alex Muscat is yet to ask a question. Clayton Bartolo, who appears to spend most PAC sessions busy on his phone, is especially vocal.
Fair and impartial, or not?
3.08pm Bencini quotes from the NAO report. The report concluded that the process “was not fair and impartial”, he reads.
Muscat says the MP is quoting the report selectively. “It found shortcomings, agreed. But they were administrative in nature... they did not impact the final decision."
'I'm not here to defend anything or anyone'
3.05pm “Without this project, our country would never have gotten a break,” he says. Muscat makes a side remark about suspicions that Daphne Caruana Galizia was assassinated because she was probing the deal.
“I’m not here to defend anything or anyone,” Muscat says. “I paid the highest political price, I had to resign. Justice will take its course.”
Daphne Caruana Galizia pictured six months before she was murdered. Photo: Matthew MirabelliCheerleaders on social media
3.01pm Muscat's running commentary on his Facebook is eliciting support from his admirers. Most of them are thanking him for his service and pledging everlasting support, amid dozens of 'applause' emojis.
Access to MOU
International financing
3pm Banks “put their money where their mouth is”, he says, and showed they backed the project by providing the financing for it. He’s asked by PN MP Graham Bencini to list them, and duly does.
Saving money
2.55pm Muscat argues that the Electrogas power station has effectively saved Malta over €150 million.
PN MPs ask for a copy of the MoU between Labour and New Energy World. Labour MPs vote against, with Glenn Bedingfield arguing that it is not within the committee's remit to delve into the affairs of political parties.
Electrogas' excise taxes
2.50pm Muscat confirms that Enemalta is paying Electrogas €2 million a year in excise taxes. He says that’s because Electrogas forked out €30 million upfront, to ensure energy bills were slashed from day one. He talks up the arrangements - Electrogas has to pay Enemalta compensation every time the power station trips, he says.
A second security of supply deal
2.49pm A second security of supply deal was intended to protect the government from the eventuality of Electrogas and Socar (the company supplying the LNG) falling out, Muscat says.
That deal, signed in 2015, effectively provided a blanket guarantee to Socar. The deal was never published and only became public in 2022 following protracted freedom of information efforts by the Daphne Caruana Galizia foundation.
A guarantee and security of supply deal
2.45pm Muscat defends two controversial deals concerning the Electrogas deal: a €360 million guarantee provided by the government that covered Electrogas’ loans, and a security of supply agreement signed with Socar.
The security of supply deal was intended to ensure that Malta would not go dark if Enemalta – which was in a tight financial spot – were to go bust, he says.
The guarantee was a temporary deal which Electrogas paid €12 million for, intended to ensure the project could go ahead until the EU gave its go-ahead to the security of supply agreement.
Gasol's exit
2.39pm Muscat says the EU Commission had agreed with the decision to have Gasol exit from the Electrogas consortium in 2015.
Correspondence between Brussels and the Energy Ministry will confirm that, he says.
Gasol was one of the consortium’s original shareholders but exited the project when it ended up on the brink of bankruptcy. The exit raised questions about the vetting of Electrogas shareholders during the bidding process.
Almost halfway
2.32pm We’re four pages deep into a nine-page statement. PAC chairman Carabott asks Muscat how much longer the statement will stretch.
“I’ve spent a long time listening, now I’d like to speak,” Muscat says with a chuckle.
What the NAO concluded
2.30pm Muscat argues the NAO report (on which this PAC investigation is based) concluded that the deal did not favour any particular bidder. He makes no reference to the various other problems the report found.
Muscat denies Electrogas involvement
2.26pm Muscat categorically denies that Electrogas had any involvement in Labour’s pre-electoral preparations for the power station plan.
That party's manifesto was coordinated by Louis Grech and Karmenu Vella and Konrad Mizzi was not involved, he says.
Muscat also says that he never took part in meetings concerning the project.
Muscat testifies to the PAC as Mark Farrugia looks on. Photo: Chris Sant FournierLaying the groundwork
2.24pm Muscat says the government before his – that of Lawrence Gonzi – seemed to have no interest in switching to a cleaner form of fuel.
He cites a 2012 Times of Malta article in which Gonzi argued that lowering energy bills would mean switching to coal-fired power.
He then notes that the Excelsior’s foreign owners, who have power station interest overseas, had approached him with a proposal. You can read more about that here.
That company, Energy World, was not shortlisted during the tendering process. Muscat notes that the NAO concluded that was justified.
Muscat's running commentary
2.18pm Joseph Muscat is testifying before the PAC - but whoever runs his Facebook account is also keeping busy.
While the former PM gives his initial presentation to MPs, his Facebook profile is posting snippets - in Maltese - summarising what he saying.
Where did the idea of a gas-fired power plant come from?
2.12pm Muscat begins his statement, and he does it by reiterating what his former chief aide Keith Schembri and minister Konrad Mizzi told the PAC – that the intention behind the project was to reduce energy tariffs for consumers while switching to a less polluting source than heavy fuel oil.
Muscat takes an oath
2.08pm Muscat takes a seat in the committee room. He's accompanied by his PA Mark Farrugia.
The former PM takes an oath and then asks to make a statement before he begins. It will take around 20 minutes, he says.
PAC chairman Darren Carabott gives him the go-ahead.
What other key witnesses have said
1.59pm Muscat is the latest in a string of high-profile individuals to give evidence to the PAC on the Electrogas deal.
The most recent of those was Yorgen Fenech, the Electrogas shareholder who is currently facing charges over Daphne Caruana Galizia’s murder.
In the event, it was little more than a day out of jail for Fenech: he did not utter a word during his appearance, with his lawyers successfully petitioning to have his testimony postponed until his criminal cases are concluded.
There have been many other witnesses over the years, from Konrad Mizzi to Keith Schembri, Brian Tonna and Edward Scicluna.
Not sure who said what? Here’s a summary of some of the PAC probe’s key witnesses and points of testimony.
Welcome
1.55pm Good afternoon and welcome to this live blog. Joseph Muscat is due to appear before the Public Accounts Committee at 2pm, to give evidence about the Electrogas deal.