Government prepared to shell out €450 million of public money to pay for power station

At yesterday’s press conference

The government is preparing us for the worst already as its benighted power station plans, which began with corruption and progressed to the bankruptcy of the company’s lead shareholder, are now sinking two years later in a chaotic morass of comings and goings and secretive deals.

Two years after the shareholders of Electrogas Malta signed their corrupt, pre-arranged deal with the Malta government, they have only just secured the €450 million loan that will finance only their capital expenditure. And they only got the loan because the Malta government, with its back up against the wall and a gun to its head, agreed to stand as guarantor for €360 million of that loan.

This means that if Electrogas Malta fails to pay its dues to the banks, the government will be legally obliged – and forced – to pay the private company’s debts, using public money and public property, up to €360 million.

As though this were not sufficiently crazy and irresponsible, we have now been told via a press conference that the government is prepared to pay for the power station itself if Electrogas Malta cannot meet its obligations.

It’s ‘wertit’, the government said, and a good investment for the economy. Which begs the question: why didn’t they do that in the first place?

This is where corruption brings you: to these dark, messy and disorganised holes in which plans go to die.

The government has now even been forced to admit that its due diligence “overlooked” or “missed” the financial tribulations of the lead shareholder in the company, Gasol, which was already teetering on the brink of bankruptcy when it signed its deal with the government, because it “looked only at the financial strength of the State Oil Company of Azerbaijan and of Siemens”.

So it looks like it didn’t even bother looking at the Tumas and Gasan Groups, either. So what is the government saying here – that it knows that the Tumas and Gasan Groups could add nothing of value to a power station project because they have no experience in this field, but that’s OK because they’re only along for the profit-ride?

WHAT SORT OF DUE DILIGENCE WAS THAT? THE SORT OF DUE DILIGENCE YOU WOULD EXPECT WHEN A CORRUPT DEAL HAS BEEN AGREED UPON ALREADY AND THE DUE DILIGENCE INVESTIGATION CANNOT BE ALLOWED TO UNDERMINE IT.

And when this website published Gasol’s disastrous accounts just weeks after the deal was signed, two years ago, which showed beyond dispute that the company was technically bankrupt, the government muttered that it had full faith in the company. Economy Minister Chris Cardona repeated the same thing when the most recent set of published accounts proved – predictably – to be even more catastrophic.