The prime minister is right: selling Enemalta and the Delimara power station to China is not privatisation (because China is a state)
I have meant to write about this for the last month or so, but the notes kept slipping to the bottom of the pile, which is no reflection on the significance of the matter.
The prime minister has said that the deal his government has struck with China on the matter of Enemalta and the Delimara power station is not privatisation but a “strategic partnership”. He was asked the privatisation question by Times of Malta, and his answer is correct.
Privatisation occurs when the state sells its holdings to privately-owned companies or to public companies (public in this case means PLCs with many shareholders, and not public as in state-owned).
When one state sells some of its holdings to another state, as has happened here, that is not privatisation but shared state-ownership, or the extension of nationalisation to incorporate another state.
Shanghai Power, which has entered into an agreement with the government of Malta to buy 33% of Enemalta for €100 million (which the government says it will blow on subsidising the cost of electricity to consumers, rather than investing in something solid) and to buy the majority shareholding in the Delimara power plant for €150 million, is 100% owned by China, that is, the state of China.
This means that Enemalta and the Delimara power station will be jointly owned by Malta and China (the states as administered by the Maltese and Chinese governments), and that Malta will have the controlling interest in Enemalta while China will have the controlling interest in the Delimara power station.
There is a further agreement in which Malta and China (the states) will enter into two joint ventures to “build renewable energy projects in the EU and provide a regional service centre”. China will have the controlling majority interest in that: 70%.
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The PM might just sell himself to China too. I am sure they will fit him somewhere.
He did that before he was elected. That is why he is prime minister.
http://www.scribd.com/doc/128130324/Joseph-Muscat-says-he-signed-an-agreement-with-China-on-Malta-s-behalf-it-Torca-18APR2010
It’s not privatisation. It’s colonisation.
Helsien? Fucking morons.
Is this legal?
Does this ensure the continued neutrality of Malta towards China? Malta as an EU member state?
Isn’t this a manner of taking the practice of corrupt government in corrupt cases of privitisation to a new level?
What were the “upfront transfers to insiders” in this case and what was China’s influence in ensuring a Labour win to permit this to happen?
Is such a transaction legal when a political party trades with a foreign state against the nation it purports to defend and outside of the circle of member states to which it belongs?
Do corrupt deals have legal standing?
Key pieces of information about the deal are missing.
How much will Enemalta pay for the energy produced by the plant owned by Shangai Electric Power?
How much will Enemalta pay for the gas fueling the plant, according to the supply contract signed by the government?
The answers to such questions would allow us to understand who is making profit/losses from the deal.
This triggers more questions.
How much is the return on investment of both? If positive for Shanghai Electric Power, is this quota lower then Enemalta’s weighted average cost of capital on the 300m€ cashed?
If negative for Shanghai Electric Power, well, in this case what is the reason for China to make a bad investment?