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maltatoday, WEDNESDAY, 3 DECEMBER 2014 2 News Chinese deal to be finalised 'in coming weeks' CONTINUED FROM PAGE 1 Mizzi con- firmed that Malta was currently negotiating prices with an inter- national company on the intercon- nection, which include congestion charges that must be paid and loss- es that have to be shouldered. The agreement with Shanghai Electric Power, which will see the Chinese acquiring a 33% stake in Enemalta and an investment to convert the BWSC plant to run on gas, should be finalised in the com- ing weeks. Mizzi pledged that the agreement would be tabled in par- liament for debate. Mizzi said the ElectroGas con- tract would be disclosed during a separate debate during which the contractual provisions and all the pricing-related information would be published. He cautioned that the publication of such information would be subject to clearance from the consortium's end and based on legal advice. The timeline of the conversion of the BWSC plant and the construc- tion of the ElectroGas plant will "be the same and both will work in synch". Mizzi said that the formula used to determine the price of energy to be purchased from SEP and Elec- troGas was "very similar" with the price variation depending on the efficiency of the plants. Further details will be announced once the government announces the final deal with SEP. Although the new interconnec- tor is built in a two-way system – meaning that Malta could both import and export energy – the government will initially be im- porting only. "Once the commission takes place and we ensure that electricity is be- ing delivered in a reliable manner, we can both import and export en- ergy. Initially, however, we will be importing only," Mizzi said. The Opposition has repeatedly taken the government to task over its failure to deliver the power plant on time, questioning how the government was financing the €80 million reduction in energy bills for both households and busi- nesses. Originally, the €30 million tariff cut for households was to be financed by a €30 million cash consolidation by the ElectroGas consortium, while the €50 million for businesses should have been fi- nanced through the switch to a gas- fired power plant. Today, Mizzi confirmed that the utility tariff reductions will be financed through a seven-year business plan in which Enemalta will have a price guarantee of five years. "This has allowed Enemalta to make financial projections for this period and has also made plans for future investments," he said, add- ing that the utility tariffs reduction for businesses was "accounted for" in the business plan agreed to with Chinese-state owned company Shanghai Electric Power. Mizzi insisted that the delay in the energy plan would "not have any impact on government finances". Various works in connection with the construction of the new power plant are already underway, in- cluding the levelling of land. LNG pumps have been ordered while PN's energy plan 'better option' – Fenech MIRIAM DALLI SHADOW energy minister George Pullicino urged the gov- ernment to publish the contracts signed with the Maltese consorti- um ElectroGas, the preferred bid- der chosen by Enemalta to build a new gas power station and supply electricity. Addressing the budgetary vote for the energy ministry, Pullicino said that despite a pledge of trans- parency, the government failed to publish the numerous contracts pertaining to the government's energy deal. "The Prime Minister was con- vinced the power plant would be built within two years of the elec- tion and said he would resign. Now he is twisting words," he said. Pullicino insisted that there was nothing stopping the government from publishing the contract signed with the ElectroGas con- sortium, as this was separate from that signed with the Chinese-state owned company Shanghai Elec- tric Power (SEP). The shadow minister said that what Labour branded as the "can- cer factory" – the Delimara phase 2 plant – will now be sold for €320 million to the Chinese. Pullicino said the €30 million cash consideration was never paid by ElectroGas to the govern- ment, despite an agreement that this would be handed to the gov- ernment upon the signing of the deal. "The €30 million should have financed the reduction of energy bills for households while the construction of the new power plant by March 2015 should have financed the reduction for busi- nesses. None of these was deliv- ered. So how is the government financing the reductions?" Pullicino suggested that the re- ductions were either being paid by "an increase in taxes", "a cheaper price of crude oil" or an increase in fuel prices paid by consumers. "The price of oil is currently the cheapest it has been over the past five years. Yet families are still paying high prices. €6 of the €30 consumers pay for diesel are taxes," he said. Pullicino argued that the average energy market price in Italy is of 5c2 per unit, while Malta will be paying 9c6 to buy electricity from ElectroGas. Insisting that a PN government would not bind itself to buy energy from ElectroGas, he said that purchasing energy from the interconnector would be cheaper and more f lexible. He said that Malta would be pro- ducing a surplus of energy: "Malta on average consumes between 240MW and 260MW. Combined, ElectroGas and SEP will be pro- ducing 300MW. What are we go- ing to do with the surplus energy? Who's going to buy that surplus when prices in Sicily would be cheaper?" The shadow minister appeared unphased when the energy min- ister denied that lawyer Neville Young had accompanied him to a recent trip to China. In par- liament, Pullicino claimed that Young had travelled to China with the minister, questioning whether the government was now prepar- ing to sell part of the Water Serv- ices Corporation to China. Pullicino added that the govern- ment should not be boasting of the tearing down of the Marsa power station "because boilers 1 to 4 had been decommissioned since be- fore the general election". He questioned what was hap- pening at Enemalta after yet an- other executive director of human resources resigned, marking the fourth resignation from the same post in 20 months. Former finance minister Tonio Fenech took the government to task over the delayed construc- tion of the power plant and its failure to meet the timeframes an- nounced in the run-up to the 2013 general elections. According to the MP, the gov- ernment turned to the Chinese because "it realised it could not finance its original plan". "And now I'm hearing that the Chinese also want to control the management of Enemalta because they don't really have confidence in the present leadership," Fenech alleged. Shanghai Electric Power has Louis Grech (left), Joseph Muscat and Konrad Mizzi shaking hands with SEP representatives on the energy deal