MaltaToday previous editions

MT 21 December 2014

Issue link: https://maltatoday.uberflip.com/i/437144

Contents of this Issue

Navigation

Page 5 of 43

maltatoday, SUNDAY, 21 DECEMBER 2014 6 News MIRIAM DALLI THE European Commission appears to be satisfied with the procedure adopted by the Maltese government and its transparency in the procure- ment of a 200MW power station. According to the European Com- mission, the Maltese authorities did not bypass any procedural procure- ment obligations stipulated by direc- tives of the European Union. In reply to a question tabled by Nationalist MEP Therese Comodini Cachia in the European Parliament, a spokeswoman for the European Commission confirmed that the principles emanating from the Trea- ty on the Functioning of the Euro- pean Union were not breached. "From the information at its dis- posal, the Commission considers that the Maltese authorities have not circumvented any EU procedural procurement obligation," the Com- mission told Comodini Cachia in a written reply. In her question, the Maltese MEP said that the Maltese government had eschewed the standard tender- ing process for the procurement of a new 200MW power station cost- ing €370 million. She said that the government had explained that its expression of interest would still be in line with EU legislation since it would 'invite a private operator to participate in the supply and genera- tion of energy and not procure a new power station'. The government, she said, also said it would ensure that bidders were pushed to offer the lowest price pos- sible. In October 2013 the Government of Malta struck an 18-year agree- ment with a consortium, including an Azerbaijani state-owned energy company, to supply Enemalta with electricity and to build a new power station. "Within the context of EU public procurement regulations on coordi- nation of procedures for public utili- ties contracts and related require- ments, is the Commission satisfied with the procedure adopted by the Maltese Government and its trans- parency? "Does the Commission agree that the construction of a new power plant can be defined as merely 'invit- ing a private operator to participate in the supply and generation of en- ergy', given that this definition could give leeway for a Member State Gov- ernment to bypass procurement?" Comodini Cachia asked. In its reply, the Commission ex- plained that contracts for the supply of energy or of fuels for the produc- tion of energy – such as gas purchase agreements – were excluded from the scope of the currently applicable "utilities" Directive when awarded by entities operating in the energy sector. "On the other hand, a power pur- chase agreement which entails the obligation for the investors to build and operate a new power plant con- stitutes a concession contract which is also not covered by Directive 2004/17/EC, and therefore only sub- ject to the TFEU Treaty principles," the Commission replied. "As for the competition proc- ess, the Commission notes that the corresponding call for expressions of interest provided for the use, as a guideline, of the provisions of the Maltese Legal Notice 178 of 2005, which implements Directive 2004/17/EC, despite the fact that these provisions do not specifically apply to the supply of energy or of fuels. Until proven otherwise, this implies that the Treaty principles have been respected." According to new timeframes an- nounced by Energy Minister Konrad Mizzi, Malta will be making use of gas-generated electricity by June 2016. A 200MW interconnector connecting Malta to the European grid will be commissioned early next year as works on the interconnector are in their final stages. The agreement between Enemalta and Chinese-state owned company Shanghai Electric Power, signed this month, will see SEP become a share- holder in Enemalta by year's end. Shanghai will pay €100 million for a 33% stake in Enemalta and €150 million for a 90% shareholding in the Delimara 3 plant – more commonly known as the BWSC plant – that was hived off to a separate company called D3 Generation Limited. The remaining €70 million will be invested next year for the conversion of the Delimara 3 plant to gas. Around 50% of Malta's required electricity will be generated through the ElectroGas consortium, the De- limara 3 plant is set to cater for 30% while the interconnector would pro- vide for the remaining 20% of the energy mix. According to the Energy Minister, the Delimara 3 plant will operate on dispatch instructions. It will be up to a technical committee appointed by Enemalta to determine the amount of electricity to be bought from the three different sources. TIM DIACONO PRIME Minister Joseph Muscat said yesterday that Malta's memo- randum of understanding with Az- erbaijani state-owned energy com- pany SOCAR (State Oil Company of Azerbaijan Republic) will "open up a new road" with one of the world's top emerging energy companies. "We agreed on deals regarding cooperation over gas exploration and the development of Malta as a logistics hub," Muscat said of the MOU signed in the Azeri capital of Baku earlier this week, where he met President Ilham Aliyev. "SOCAR is an emerging energy company that is looking beyond its borders and has already entered into partnerships and joint ventures around the world. "It recently purchased a US-owned petrol pump company in Switzer- land, and [former EU Commission- er] José Barroso, the French Presi- dent and the Italian Prime Minister also entered into deals with them," Muscat said. "The Opposition is casting doubts over Azerbaijan's democratic cre- dentials, but if the EU itself enters into deals with them, then I don't see why Malta shouldn't. Besides, Dubai is hardly the most democratic place in the world but that hadn't stopped the previous Nationalist government from entering into an investment deal with them over Smart City." SOCAR has a 20% shareholding in ElectroGas, the consortium con- tracted by the government to build a new LNG power station. He compared the SOCAR memo- randum to the earlier agreement with Chinese state-owned company Shanghai Electric Power, which re- cently secured a 33% stake in En- emalta in a €320 million investment. "When we first signed a memo- randum of understanding with SEP, people were doubtful because they had never heard of the company," Muscat said. "Now we've signed the biggest foreign investment deal that Malta has ever seen, in a company that the previous government had wanted to sell for €1, and have also started entering into deals with oth- er European countries." 'More jobs for Maltese' Muscat admitted that the govern- ment must do more to ensure that newly-created jobs are taken up by Maltese workers. "Almost half of the newly-created jobs are being taken up by foreign- ers, either because the Maltese aren't qualified for them or because they're not interested in them," Muscat said. "Therefore, we need to ensure that high-quality jobs are being created and that the Maltese are properly trained for them." 'Kappara junction project a high priority' Muscat described the Kappara junction project as a 'high priority' for the government. "We have the project plans and funds for it, but we want the Coast Road project to be completed first to prevent excess traffic congestion in the north," Muscat said. "We aren't planning these road projects because Malta will host a CHOGM meeting next year – God forbid that we remain stuck with that way of thinking. I understand people's traffic problems. When I at- tend official visits, I make sure that my car isn't surrounded by a police escort blasting their sirens, so that I can get to experience what the peo- ple experience everyday. "I accept criticism and use it to improve the government's perform- ance. However, I can feel a sense of optimism in the country at the mo- ment. This is a government that is delivering economic results beyond people's wildest dreams." Ailing democracy in Azerbaijan not an obstacle to energy deal EC finds no breach of procurement regulations over new LNG power station Muscat: Opposition did not bat eyelid at investment from Dubai, 'hardly the most democratic place in the world' Joseph Muscat and Azerbaijan President Ilham Aliyev shake hands Shaking hands over the Shanghai Electric Power deal Energy supply contracts 'excluded'

Articles in this issue

Archives of this issue

view archives of MaltaToday previous editions - MT 21 December 2014