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On 11 January 2017, @EU_Commission approved the ElectroGas project for State Aid by Enemalta (the SoSA). One of the grounds was that the envisaged profit did not permit overcompensation. The EC also noted that payment was fixed. 1/
https://ec.europa.eu/competition/state_aid/cases/264986/264986_1870314_62_2.pdf
https://ec.europa.eu/competition/state_aid/cases/264986/264986_1870314_62_2.pdf
One of the key elements of these PPPs is so called risk transfer. If the operator runs into cost overruns then it must suffer the consequences & not be compensated by the government. If it is paid by the government for its own delays then that is a sham and unlawful state aid 2/
Purely coincidentally I’m sure, in January 2017 too, the ElectroGas shareholders realized that whether due to cost over runs or sheer greed, their profits weren’t going to be enough for them. 3/
Leaked emails show that they figured that if they could somehow pass on €46.5m of excise tax liability onto the State Utility company Enemalta they could boost their IRR from the 7% deemed reasonable by @EU_Commission up to 9.8%. 4/
By way of further background the @EU_Commission noted that the original projections showed that the original return for the project was going to be in the region of 8-9.2%. The cost overruns brought it down to 7% which was deemed as evidence of risk transfer. 5/
Evidently the ElectroGas shareholders weren’t too happy with bearing the risk of their own delays and wanted to recoup this from the €46.5m in excise they were meant to pay when generating electricity. 6/
There was a problem though, back in 2015 they locked themselves into a fixed price for electricity to the State operator Enemalta which was inclusive of excise tax. 7/
Enemalta aware of this (as well as likely of State Aid issues) originally refused to accept to pay the taxes that ElectroGas needed to pay. 8/
I mean if you agree a price inclusive of tax you don’t expect the seller to magically then say at the 11th hour “oh by the way that excludes tax” 9/
But the Minister @KonradMizzi (who as we know from #PanamaPapers) was set to receive €5,000 per day from Yorgen Fenech, a shareholder in ElectroGas) was clearly feeling generous. 10/
On 28 October 2017 during a private meeting with Yorgen Fenech, just 12 days after #DaphneCaruanaGalizia was assassinated, he agreed that Enemalta would pay the tax. Basically sod the fixed price or agreements signed. 11/
On 30 November 2017, Enemalta with the backing of Konrad Mizzi signed a letter saying “you know those agreements we signed back in 2015, they were exclusive of tax ok. We’ll pick up the tab.” 12/
And that in a nutshell is just one of the dirty machinations behind the ElectroGas deal. @MaltaGov would boast that the deal is “EU Commission” approved (although this was already limited in scope to State Aid) but it even lied to the @EU_Commission. 13/
You can read the investigation by @TheShiftNews here: https://theshiftnews.com/2020/09/07/konrad-mizzi-gifted-electrogas-over-e40-million-in-excise-tax-refunds/ 14/
And by the way, don’t hold you breath for a rebuttal. This is the pathetic “official” reaction. Basically “what do you want me to say?” from our incompetent and evidently heavily compromised finance minister no less: 15/
