Electrogas said on Friday that an internal review it carried out had found no signs of corruption at any stage of its project to build a gas power station in Delimara. It said that it had made no profit to date.
EGM has not paid any dividends to its shareholders and is not expected to do so in the near future, the company said in a detailed statement. “The project is considered as a long-term investment and its main focus is the security of supply to Malta.”
The company said it had launched an “extensive internal legal and forensic review” in 2019, following the appointment of three new directors following the resignation of Yorgen Fenech.
Fenech was arrested in November 2019 and has since been charged with being the mastermind behind the assassination of journalist Daphne Caruana Galizia in 2017. Fenech was part of a joint venture, GEM Holdings, that owns 33 per cent of the power station.
The review was launched, the company said, as the new directors were aware of the “ongoing public domain allegations of corruption, wrongdoing or impropriety” relating to the power station project.
Electrogas said that its statement sought to address “speculation in the media” about the company’s profit. That speculation was fuelled by testimony earlier this month that €5 million in excise tax owed by Electrogas had been “absorbed” by Enemalta, on the instructions of former Energy Minister Konrad Mizzi.
Electrogas said that it made no profit from the sale of LNG to Enemalta, saying this was a “pass-through cost”.
Instead, it makes its money by charging a fixed fee for electricity its power station produces, with the fee not reliant on the amount of energy Enemalta buys from it.
The company said this sort of deal, referred to as an ‘independent power producer’ business model, was commonplace for large-scale energy projects.
LNG prices were fixed for five years until April 14, 2022 “based on the tender requirements”, it said, with the price switching to a floating one based on a pre-agreed formula after that date.
Electrogas also referred to a 2017 breach in its IT system. It said it had discovered the breach in late December of 2017, and subsequently reported it to the police. A magisterial inquiry is ongoing and to the company’s knowledge, the perpetrator has not yet been identified.