China’s Shanghai Electric posts €15 million profit as Enemalta flounders following sale

Tista’ taqra dan l-artiklu bil-Malta hawn.

Shanghai Electric, the Chinese government-owned company that bought Enemalta’s most modern plant in 2014, has posted a profit of some 15 million in 2020, while Malta’s electricity distributor Enemalta, is floundering in tens of millions of losses, The Shift has learned.

According to the latest set of audited accounts for the year 2020, D3 Power Generation – which bought the state-of-the-art BWSC electricity generation plant in 2014 from the Labour government – made millions in profits at the same time as the Malta state electricity supplier struggled to cover its costs and was forced to start depending on subsidies from taxpayers.

The accounts, audited by RSM, show that in 2020, in the midst of the pandemic, the Chinese company was paid some 95 million for selling its LNG produced electricity to Enemalta, netting it a profit of 15.2 million. This was some 2 million less than the profit reported by the same company in 2019, when it sold around 73 million’s worth of electricity to Enemalta.

D3 Power Generation, which is 90% owned by the Chinese government, while Enemata holds the remaining 10%, has been making millions of euros in profits since the Chinese government took it over in 2014 for just 150 million.

According to its financial statements, it has just 18 employees on its books to operate the power plant, though the state agency employed hundreds when it used to run the same operation.

Industry sources told The Shift that the deal made by the Chinese – then described by disgraced former prime minister Joseph Muscat as Enemalta’s rescue from insolvency – turned out to be very profitable for them, as they were guaranteed millions of profit every year through a power purchase agreement with Enemalta.

“In just a few years, the Chinese are almost on the brink of already getting back their whole investment,” the sources said.

“Ironically, the excuse which the government used at the time to sell the new power plant at a ridiculous price – the rescue of Enemalta – is now resulting to be as hollow as the deal itself as Enemalta is back into deep red territory,” they added.

Enemalta’s interests on the board of directors of D3 Power are being represented by an 86-year-old former Labour MP, Salvu Sant, appointed by Prime Minister Robert Abela in October after removing him from Enemalta’s board of directors.

According to the latest accounts, the four directors, which, apart from Sant, include three Chinese officials who reside in Malta, shared 200,000 in fees in 2020.

The four directors of D3 shared 200,000 euros in remuneration in 2020

While D3 Power Generation has published its audited accounts, Enemalta has been concealing its financial position for years.

The last published accounts go back to 2018 and no one really knows the state of the company.

Earlier this week,  The Shift reported that Enemalta has reverted to seeing millions of euros in losses every year since 2020. 

Both Prime Minister Robert Abela and Energy Minister Miriam Dalli last week refused to give indications of how many millions the government pays in subsidies every month to Enemalta to keep it afloat. Their only comment was that this state aid – which is legally dubious under EU rules – is a measure to keep consumer prices stable.

This state aid, forked out by taxpayers, is also going to the Chinese government which, through the same BWSC deal, was sold 33% of Enemalta for just 100 million.

The 2014 sell out has turned Enemata into no more than a distribution monopoly without any real power generation capacity of its own.

Currently, Enemalta is totally dependent on private entities to provide electricity through various purchase agreements with Electrogas, the owner of the LNG power plant, D3 Power, the owner of the former BWSC plant, and the interconnector which imports electricity from Sicily.

In case of an emergency, Enemalta still owns a few power generation units in Delimara, which go back to the 1990s and run on heavy fuel oil.

Malta currently has a generation capacity of 537 MW with an extra 200 MW possibility from the interconnector. Plans for a new interconnector were announced a few months ago.

                           
                               
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Francis Said
Francis Said
6 days ago

If this is not a prime example of mis-manage by the Labour Movement, then I cannot think of anything worse
Lies from start to finish. Gross incompetence by Joseph Muscat, Konrad Mizzi, Keith Schembri and whoever else advised them.
Time for Parliament to resume and serious and open discussions are held to see how to get out of this situation ASAP
Second important discussion and solution found to get rid of the Vitals/Steward entanglement.
Third important discussion and solution how and when drastically reduce the cost of this incompetent government. Millions have been wasted in the previous two administration, economically Malta and the Maltese need to stop living in the clouds and brought down to earth.
Social benefits, pensions, free hospitals and education must not be touched. Hit the few millionaires hard and pass on some of the benefits to low earning citizens to cope with the extraordinary rise in the cost of essential items.
We face a National Crisis, the prospect of an escalation of the Russian/Ukraine conflict and still a possible backlash of Covid. So more theatrics but serious and forward thinking decisions need to be taken.
Together we stand, divided we fall.

KLAUS
KLAUS
6 days ago
Reply to  Francis Said

If we look at the many millions from the EU pots that are given to Malta every year and then look at what we got for it.
Not much has arrived.
The flow of money seems to have taken several corrupt forks.

I WANT THE MONEY BACK!

Francis Said
Francis Said
6 days ago
Reply to  KLAUS

Unfortunately we have been relying too much on the sale of passports. All new projects under the PL government have certainly not reached the targets that we, the ordinary citizens were told to expect.

Last edited 6 days ago by Francis Said
viv
viv
6 days ago

Things were indeed simpler a few centuries before. This sort of conduct would have earned misters Muscat, Mizzi, Schembri and the whole lot their heads stuck on pikes outside the city walls.

James
James
6 days ago

The chickens are coming home to roost!

Keep up your wonderful efforts to expose the endemic corruption which has been able to take such a hold at every twist and turn to ensure impunity for all those implicated,including the lawyers and accountants who signed off the original deals which entailed selling the family jewels.

Albert Beliard
Albert Beliard
5 days ago

When the truth is revealed, it will show “prime examples” of massive fraud, state aid and sanction evasions violations against the Iranian regime which will unfortunately drown Malta and its ‘disgusting’ corrupt Labour regime into a black listing by the FATF, followed by a recommendation of an Article 7 from the EPPO whose Head was mislead on a ‘wild goose chase’ last October when she was in Malta questioning various officials and police commissioners.

Joseph
Joseph
5 days ago

Now we can say that these politicians in photo ‘ LAUREL AND HARDEY’ AND THE DISGRACED PL FALSE god, had taken the whole nation ‘GAHAN’ FOR A LONG BIG RUN. THE HAVE STOLEN OUR NATION THREE TIMES. The reason for this is that they have lost the word GVERN TAL-HADDIEM. Li issa gie gvern tal-kriminali u tal-hallelin SINJURI POLITICI. WICC pajjizna gabuh tal-misthija barra id-dejn li gabu b’idejhom biex serqu l’elezjoni bix-xiri tal-voti. M’ghandhom misthija quddiem dawk il-55% li ivvutaw lill opposizjoni u dawk li ma tefghux il-vot ghal xi raguni. 10 biljuni euro dejn.

Last edited 5 days ago by Joseph
georgezammit127
georgezammit127
4 days ago

state of the art ps unbelieving HFO the most dirtiest oil

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