Further delays anticipated as surprise bids submitted for interconnector

The installation of a second electricity interconnector between Malta and Sicily, already delayed by a year, is expected to be delayed further.

A multi-million-euro tender issued by the government has unexpectedly attracted bidders with no track record in the industry who submitted unrealistic bids in an attempt to be awarded the massive contract.

While the tender has an indicative value of €68 million, a Sardinia-based Italian company, SELT S.P.A. – sistemi elettrici telefonici – has submitted a bid for just half the tender’s value – €34 million.

The Shift is informed that this has raised eyebrows among the top executives of Interconnect Malta – the government entity responsible for the project’s execution.

While the bid may look attractive to the Maltese taxpayer at first glance, sources at Interconnect Malta described it as “very suspicious” not only because the price is commercially unfeasible but also because of the company’s lack of experience in the field.

They also said the bid is too low and impossible to achieve, and it may further delay the completion of the project given that the evaluation will take time and thorough due diligence will be required.

According to the sources, SELT has never completed a project of the magnitude required for Malta’s interconnector.

Meanwhile, another low bid was submitted by a Chinese company, Hengtong Optic-Electric Co Ltd – which, if chosen, may put Malta at loggerheads with the EU since the project is financed through EU funds.

The tender is for laying some 25 kilometres of underground cable, both in Malta leading to the Maghtab land base and in Sicily leading to the base station in Ragusa.

Although the work should be easier than when the first interconnector was laid, as the foundations for a second cable were already prepared by the PN administration in 2012, the job is of significant complexity.

Five companies have submitted bids, with Bonnici Brothers being the only Maltese company in the competitive process. However, the company’s bid, at €64.3 million, is the most expensive, making it unlikely to be declared the winner.

Enemalta has already awarded the same company a lucrative tender to install a temporary diesel-fired power plant in Delimara to compensate for the lack of energy availability caused by the delay in installing the second interconnector.

Already a year late

In 2021, Energy Minister Miriam Dalli announced the government’s decision to increase Malta’s electricity capacity in response to rising demand. The chosen expansion option was the implementation of a second interconnector.

Dalli had stated that the second interconnector was to be up and running by the summer of 2025.

However, the Energy Minister’s plans have already gone awry. The installation of the interconnector is already 12 months behind schedule, and the latest complications with the new onshore works tender are expected to complicate matters further.

An expensive temporary solution

Following last summer’s debacle, when the country was caught unprepared for increased demand, with consistent power cuts across the country for many days, Enemalta awarded a rushed €37 million tender to install a temporary power plant this summer.

The emergency power plant, leased until the new interconnector is ready, will be supplied by Bonnici Brothers through a Saudi company and used only when the electricity produced locally and through the interconnector is insufficient to meet the demand.

Instead of choosing a cleaner solution, including Liquified Natural Gas (LNG), already available at Delimara, the government opted for Bonnici’s diesel-fired plant, using one of the most polluting fuels on the market.

Bonnici, who has no experience in the area, is closely connected to Prime Minister Robert Abela, who served as the company’s lawyer and was also in business with its managing director, Gilbert Bonnici.

Enemalta Chair Ryan Fava said the temporary plant had to be installed by last May, but this has not yet happened.

In the meantime, Malta experienced its first nationwide power cut of the summer a few days ago, which, according to Minister Miriam Dalli, was caused by maintenance on the current interconnector.