Miriam Dalli “played down” the significance of the Electrogas deal her predecessor as energy minister, and her boss at the time, signed with the gas reselling agent supplying the company that owns the power station that was to supply Malta’s state-owned electricity company.
That sentence requires a diagram.
First there’s Enemalta that owns the electricity grid and sells electricity to consumers. Then there’s Electrogas that owns a power station and sells electricity to Enemalta. To run the power station, Electrogas buys gas. It acquires gas through an agent, Socar, that unhelpfully for the neatness of this illustration, also part-owns Electrogas.
Now for a reasonably efficient power company, the cost of fuel (gas, in this case) amounts to around 80 per cent of its entire expenditure base. A lot of the rest of the expenditure goes in paying off debts for the infrastructure: building the power station itself.
The government of Malta guaranteed the loans Electrogas needed to build the power station. The agreement published by The Shift News on Sunday shows that the government also guaranteed payment to Socar for the gas supplied to Electrogas.
Dalli said this wasn’t such a significant discovery. The agreement was terminated in 2017, she said, and it was never used. She assumes rightly that most of us are not in the business of running power stations. She assumes wrongly we are all complete idiots.
The agreement was not “terminated”. It had run its course. It had served its purpose. The agreement was not “unused”. It had fulfilled its function entirely.
If I go to the bank and ask for a million euro, they’d laugh me off. But if I said I had an unencumbered property worth a million euro that I could put up as collateral to secure the loan, the bank would sit down and talk.
If Dalli doesn’t think it matters all that much, I’ll use her house to secure a loan I’ll take. If I repay my debts, it would be like nothing ever happened. If I don’t repay my debts, well who cares? It’s her problem now.
That’s what Konrad Mizzi did for Electrogas, except that he didn’t use his house as collateral. He used yours. That way Electrogas got the first stocks of gas supply it needed to generate electricity to sell to Enemalta effectively paid for in advance by its client.
Electrogas sold Enemalta the energy it generated from that first stock of gas, issued bills, and used the payment to pay for the next supply of gas. From that point on, the government’s guarantee on its debts with Socar was no longer necessary because it could rely on another guarantee the government issued it with separately: to buy all the electricity it produces at a secured price, no matter whether that would be more or less than others could sell energy for.
Anyone can set up a multi-million business on this basis. Have you considered opening a restaurant? You only need Mizzi as your customer.
Mizzi will promise to eat whatever you cook for him, good or bad. He promises to pay for it at a rate that makes you a profit, irrespective of whether next door someone is selling better food cheaper.
But there’s more. Mizzi will put up his neighbour’s house as security for your bank so you can do up your restaurant. And Mizzi will provide his other neighbour’s house as collateral so you can get the bank to give you an overdraft to pay for the ingredients.
If Dalli doesn’t think it matters all that much, I’ll use her house to secure a loan I’ll take- Manuel Delia
If the analogy of the restaurant is going to be complete, we should specify that Mizzi also happens to be the government and, in addition to securing your loans, advancing you a credit line to purchase the ingredients, and promising to buy all you can sell without ever having tasted your food, he also relieves you of any obligation to pay taxes on your, for want of a better word, investment.
That’s what Mizzi did with Electrogas. He waived their excise tax obligations, agreed on a fixed price for their product independently of market realities, assured them of purchase, guaranteed their capital costs, and covered their start-up stock.
Only his Panama account and its link to Yorgen Fenech’s Dubai account explains this madness. He was evidently paid, or at the very least promised, kickbacks to do this.
Only Joseph Muscat’s complicity explains the fact Mizzi wasn’t fired on the spot the moment he proposed this deal to the rest of the government. Rather, Muscat gave Mizzi the opportunity to repeat the same habit of volunteering the national backside for sodomisation at the hands of paymasters when three public hospitals were privatised, when the catering school was “relocated”, and so on.
I was about to include the “rescue” of the national airline in that list of catastrophes but there’s every chance he was happy arranging for that bout of sodomy for kicks.
Dalli was Mizzi’s PR person when all this happened. After Daphne Caruana Galizia had exposed his secret Panama structures, Dalli campaigned for and celebrated Mizzi’s election as deputy leader of the Labour Party.
She wrote on her Facebook how she looked forward to working with him “for the good of the Labour Party and the country”.
And now, as his substitute, she continues the cover-up. That’s also why he doesn’t face justice. That’s why Mizzi doesn’t stop smirking even in the company of the god he claims to have found.
It is not rhetorical to say that those who excuse, minimise or cover up corruption are also corrupt.
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