Shanghai Electric/Enemalta agreement
Published:
December 13, 2014 at 7:00pm
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If that’s a Euro320 million contract, I’m an investment banker. What’s that – twenty pages?
I’ve seen longer preambles, and just for a couple of blocks of flats.
It’s all about secrecy and confidentiality.
No dates, no exit clauses and significantly no penalties. We basically asked the Chinese to come over and run this ‘contract’ as and when they please.
Just love 5.4 and 5.5.
5.4 states parliament will review the contract, 5.5 simply cancels the first.
Jozef, if they planned to hand them over to Reno Calleja for translation it would have been rather expensive to have the contract longer than fifteen pages considering Calleja charges Eur1,000 to get a visa translation done.
At first glance, very vague and open ended, with no choice of law or jurisdictions clauses, for example and nothing by way of specification of the technical parameters. Looks more like a memorandum of understanding (MOU) or Statement of Principles.
Looks like a roadmap without street names or North direction.
Read para 1.2.9 and this talks about a three-year business plan.
Three years is the constitutional lifetime of this government, the Chinese already have their doubts about Joseph’s future.
Read para 5.4 and this talks about confidentiality.
Read 5.4 Confidentiality:
This states that the confidential details cannot be shown to anybody, not even parliament, if not legally necessary to do so.
Joseph will inform parliament that the details are of a confidential nature and that Shanghai Electric has not agreed to disclose the confidential details.
Joseph has just capitulated to China.
Am I right to understand that this agreement should have been kept confidential and even the announcement of it should have been kept reserved, as per Article 5 of the agreement itself?
Can someone please give us the real agreement. If this is the agreement that took so long to be concluded resulting is delays, I’m Angelina Jolie
Who were the lawyers advising the government on this contract? They should be debarred along with Konrad Mizzi who should be fired for signing a contract giving away 33% of our only energy supplier without so much as one warranty on the part of the buyer.
No resolution of dispute clauses, no warranties, nothing to protect us.
That confidentiality clause is a joke, and what and where is the power purchase agreement mentioned in the clause?
And what are all those companies just set up like that?
You do not need a lawyer to come up with something like this Ghoxrin Punt. You just need to be desperate to conclude something at all costs to have something to publish to the Maltese plebiscite.
There is only one government party to this agreement. And this is not partial – privatisation?
1. Who is representing SEPM?
2. Why is no information given re CPI?
3. GOM (Malta) & Enemalta (Malta) to SEP (China) & SEPM (China)
As you predicted. Unfuckingbelievable.
The publication of this agreement is of very limited public interest use.
It is definitely meaningless for any decision in Parliament, where the public interest must be safeguarded.
The agreement must be accompanied by the following documents among others:
1. A copy of the Power Purchase Agreement between Enemalta and D3 Power Generation Ltd, the new company which owns the BWSC plant and which is controlled by Shanghai Electric Power Co Ltd (through their Maltese subsidiary). Reference to this agreement is made in the published contract.
2. Pro-forma financial statements and accountants/auditors reports which show the financial position of Enemalta and D3 at the date of the proposed investment/share transactions.
3. Business plans with financial forecasts for the forthcoming 10 years of Enemalta and D3, with detailed explanations behind those forecasts.
4. Full independent experts’ valuation reports for Shanghai’s share of 33.3% in Enemalta and for the 90% share in D3.
5. In the case of D3, a valuation of the BWSC plant.
6. Details of all loans at Enemalta analysed from the last audited financial statements to how they have been split into the new Enemalta plc and D3.
7. Full details of the spin-off of the Petroleum Division from Enemalta.
8. Registration details for all Maltese companies, showing shareholdings and directorships, from the MFSA. Are all the Maltese companies fully registered? Why does the contract say that SEP (Malta) Holding Ltd is an INDIRECT subsidiary of Shanghai Electric? Are there other minority shareholders involved there?
9. Identification documents and details for all directors and shareholders, especially the Chinese ones.
10. Financial statements in English of Shanghai Electric Power Co Ltd – what is known about the financial status of this company except that it should be owned by the Chinese government?
11. Copies of the signed Power Purchase and Gas Supply Agreement with Electrogas Malta. Prime Minister had confirmed on live TV back in May that this agreement had been signed.
The PP&GS Agreement is fundamental to the transfer to Shanghai Electric because the BWSC plant will be running on gas which should be supplied by Electrogas. The business plans of D3 have to rely on the agreement with Electrogas. The Power Purchase Agreement between Enemalta and D3 cannot come into existence without gas supply from Electrogas.
Interestingly, the parties to the contract do not include China Power Investments Corporation, which is only mentioned in the context of the MOU signed in September 2013.
The Opposition would be best advised not to vote in favour of this agreement without those documents.
In any case, the analysis of all those documents is going to take time, and the Opposition should make sure that it is allowed enough time to examine those documents with experts.
Earlier today, George Pullicino spoke about the absence of supporting documents to the agreement. He is most definitey right.
A couple of other observations are pertinent:
1. The latest audited annual reports of Enemalta are some two years old. Before Parliament approves these transactions, Parliament should be provided with the audited financial statements for the last financial year of Enemalta.
Considering that the deal involves Enemalta plc, a newly formed company, it is still going to be necessary to establish how the transfer of business from the Corporation to the plc has been subjected to audit as the closing position of the Corporation and the opening position of the plc. Has that information ever been made public?
2. As other comments here suggest, the agreement is not a share transfer/purchase agreement. It seems that share transfer/purchase agreements should also be presented for Enemalta plc and D3, with relative warranties and obligations.
3. The agreement is very vague on the obligations on Shanghai Electric, such as what knowledge and contributions they will make to the strategic partnership with Enemalta.
Where’s the sanity clause?
Enemalta is currently investing in an interconnector with a value of about Eur 200 million.
Meaning that out of the amount of Eur 100 million paid by Shanghai Electric into Enemalta, Eur66 million relate to Shanghai Electric’s 33.3% share in that interconnector.
So much for Muscat’s claim that Shanghai Electric will pay Enemalta’s debts.
Christ, they’ve got their grubby hands on it. Bastards.
http://www.independent.com.mt/articles/2014-12-14/local-news/Electricity-made-in-China-more-expensive-than-Electrogas-interconnector-options-6736127283
It’s not looking good.
They shouldn’t be allowed anywhere near that interconnector.
Where’s the contract? We’re still where we were last week. Nowhere.
No money has been transferred and no definite date when it will be made available. No penalties for delay of transfer either.
There has been much dragging of feet by the Chinese so far and it doesn’t seem that things will be changing any time soon.
This is no contract. This is the script for the Christmas Pantomime.
You say: “This is the script for the Christmas Pantomime.”
“Where is the contract, where is the contract?”
“It’s riiiiight behind youuuu.”
The Chinese are getting:
a) 33.3% of the Interconnector which has a value of at least 200 million, which equates to 66.6 million;
b) 93.3% of the BWSC (D3) which has a value of some 150 million;
c) by Mizzi’s prospectus, when all is up and running, this setup will make an annual profit of 187 million, so the Chinese will make an annual profit of some 62.3 million;
d} So China outlays 320 million but by the end of five years they recoup all that and remain owners of a third of our Interconnector (valued at 66 million), practically all of the BWSC (valued at 150 million) and the other new power plant of Electrogas is owned largely by foreigners and other dictatorships;
e) bottom line is that the Chinese will be in the black within THREE years of the setup being finalised (you have to add the 70 million cost of conversion of D3.)
Now, why did we need these Chinese in the first place when we could have done it ourselves and remained owners of our own destiny. Liars and incompetents.
oops, the 70 million is already in the 320 million. So the Chinese recoup in TWO years. My mistake sorry siehbi.
U ijja.
In announcing the agreement with Shanghai Electric Power the goernment boasted that this agreement does not contain any commitment on Enemalta to purchase a minimum amount of energy. This is yet another blatant lie as clause 1.3 provides that each party is to enter into ADDITIONAL agreements to implement the investments contemplated by this agreement and that these ADDITIONAL agreements shall prevail over this agreement. Furthermore clause 2.8 states that the commercial transactions between Enemalta and D3 (the company 90% owned by the Chinese that will own the BWSC plant) are to be governed by the Power Purchase Agreement.
If government wants to be serious he should publish the Power Purchase Agreement to show that Enemalta is not committed to by from BWSC….assuming that there is one in place!
Clauses 1.2.1 and 1.2.3 state that the value of the shares are €1each.
11.2.1 says that Malta owns 200 million such shares = €200 million.
Then it says that the Chinese will buy 33.3% for €100 million.
Isn’t this 50%? More so in 1.2.3 the amount of shares is 16.6 million at €1 each = €16.6 million and the Chinese are paying €150 million for them.
Something ‘confidential’ must be behind all this (possibly in the MOU of September 2013) and we will not know about it because I doubt that for something that in total should cost €83.3 million the Chinese government would pay €250 million.
So who, in this befuddled labyrinth, represents the people of Malta? OMG, surely not GOM?
What a naive and stupid Goverment we have. European and world leaders do not give full control to the Chinese government by selling to them the (only) power station like our naive and stupid Prime Minister did.
I agree UK and more countries are looking into China to manage and build their power stations but only manage and build them, not own them.
The secret of freedom lies in educating people, whereas the secret of tyranny is in keeping them ignorant. – Maximilien Robespierre
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