Opposition calls out Prime Minister’s silence on €40 million to Electrogas

The Opposition has called out the silence of the Prime Minister as well as the Finance Minister following revelations by The Shift that former Minister Konrad Mizzi had gifted Electrogas over €40 million by transferring fees owed for excise tax onto the public.

“Robert Abela and Edward Scicluna’s silence makes them complicit in a scandalous decision that deprived the Maltese people of €40 million simply to make Electrogas more profitable,” the PN said in a statement.

MPs Mario De Marco (spokesperson for finance), Claudio Grech (spokesperson for the economy) and Ryan Callus (spokesperson for energy) said if Abela and Scicluna had not been in agreement with this decision, a statement would have been released denying their involvement.

The Shift revealed last week that Mizzi’s intervention in 2017 led to taxpayers having to carry an additional burden amounting to over €40 million to ensure profits for Electrogas shareholders in breach of the tender terms.

Finance Ministry private secretary Alfred Camilleri revealed in a hearing of the public inquiry into Daphne Caruana Galizia’s death that Enemalta had “absorbed” €5 million in excise tax that was meant to be paid by Electrogas. In fact, the excise tax burden amounts to over €40 million for the duration of the project and is to be carried by taxpayers, according to leaked emails seen by The Shift.

Although the winning tender price by Electrogas was meant to include excise tax in it, emails show that Electrogas shareholders decided that, in order to make a good profit, this tax had to be passed on to Enemalta.

In early January 2017, GEM Director Mark Gasan told his colleagues that the “excise tax is a €40 million issue that if we resolve [with the Minister] will heavily impact [our profitability]”.

The emails show that the shareholders had ‘verbal’ support from the government – specifically former Energy Minister Mizzi – that this “issue” would be resolved.

“But the finance minister cannot abdicate his responsibility to collect taxes and allow decisions on excise tax dues to be made by former Minister Konrad Mizzi,” the Opposition said.

October 2017 saw a dramatic change in the fortunes of Electrogas shareholders.

With pressure of a default under its financing agreements removed through yet another extension of the Maltese government’s unprecedented €360 million guarantee, Fenech, now accused of financing the murder of Caruana Galizia, also sought to solve some other outstanding negotiation stumbling blocks as well as the thorny matter of €40 million in excise tax.

On 28 October 2017, this deal seems to have been struck.  Fenech announced that following a meeting he was asked to attend the day before – 11 days after Caruana Galizia was assassinated because of what the police suspect she was about to reveal on this deal – government agreed that this needs to be passed through to Enemalta.

This agreement was eventually documented in a side letter dated 30 November 2017, which an investigation by the Auditor General dryly described as being “of note”.

By December 2017, Electrogas started issuing invoices to Enemalta in a new format. Alongside the charge for electricity, a new item appeared – “excise tax charge”. Taxpayers footed the bill.

This is the legacy of the Labour government that Abela keeps defending, the Opposition said, adding that in light of the economic and financial challenges being faced it results in increased expenses for families and businesses in the country.

READ THE INVESTIGATION:

Konrad Mizzi gifted Electrogas over €40 million in excise tax refunds