Comment of the night
POSTED BY GHOXRIN PUNT:
I have the following observations to make following Konrad Mizzi’s show on Bondi Plus.
A desktop review is normally carried out as a precursor to a feasibility study, which is then the basis for stress testing various optimistic and pessimistic scenarios on which to base a pricing plan. It is not the basis on which to actually commit to a cut of 25% in electricity rates.
A PowerPoint presentation by consultants is the start of the project. A presentation should always have the detailed assumptions and normally just reflects the conclusions reached.
Business suppliers, in this case the Labour Party that is trying to sell its proposal to the electorate, will then make available to the client (the electorate), the detailed workings and assumptions.
Telling me that they paid for the consultancy and that I am not privy to the detail is criminal, when I am expected to give them my vote based on this one pivotal point.
Telling me that Joseph respected me enough to give me all the options, but not enough to allow me to verify those options is not on.
In my work life and in my private life I have dealt with enough project quotes to know that you always need to add an additional buffer of 25% to 50% on a price quoted. What buffers are there in the assumption?
In terms of timing, the time buffer is normally 100 to 200%. This both in terms of contruction and in terms of IT and systems. And no matter the penalty clauses.
Any Labour government is going to be the beggar on this given the promises made, so negotiating leeway is restricted.
Commercial sensitivities only exist when a preferred supplier is already earmarked. Has the supplier already been chosen? Are we going to find ourselves faced with some Made in China power station which risks breaking down the moment it is operational, or worse still some shortcuts in quality accepted because of time constraints?
Somehow collapsing bridges in China come to mind.
Passing gratuitous or facetious comments to your counterparty does not endear you to the average viewer. The reverse happens, and the average intelligent viewer will understand that you do not have an answer to the question.
What is going to happen after 10 years? Will we find ourselves dependent on the private sector with a price monopoly? I am a capitalist but even I see the benefit of the energy sector in an island our size being state-dependent.
Labour have given us hot air, again. Unless there exists an agreement or a letter of intent already, the ‘guarantee’ you are giving is worthless and does not stand on the basis of the presentation.
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I have always tried to vote for a worthy PN candidate and this time I will be extra careful so as not to elect some JPO or Debono. But honestly, at the end of the day, I do not care how arrogant or the million adjectives PN MPs are given.
I simply want to be governed by an administration which can adequately deal with both everyday and extraordinary problems.
I am already worried and the PL have not yet won. Who wants to spend the next five years worried and anxious? No thank you. I already did that for the best part of sixteen years.
New looks and logos will not impress me and please note – Joe Mizzi, do go back to your previous hairstyle and wear a dark suit in January.
All well and good, Ghoxrin Punt – but will the bingo players and those coffee morning people understand this?
25th June, 2010
“Mr Lieberman (Israeli Foreign Minister) ignored questions about Ms Zammit’s incident on his way out of Castille and simply walked into his car to head to the second meeting of the day with Labour leader Joseph Muscat.
(…)
Journalists were then asked to leave.”
One wonders if they were discussing the Bateman plant and the 2013 electoral campaign.
http://www.timesofmalta.com/articles/view/20100625/local/protesters-greet-israeli-foreign-minister.314546
MALTA TAGHNA LKOLL
35 years ago, not many people would have been proud to think of even uttering this slogan due to the then haphazard way of politics and general situation looming in our beloved country.
Today, even the party in opposition cannot deny the giant strides that our country had managed to take towards the advancement of this small nation with no material resources whatsoever.
This, I believe, has been achieved by the intelligent manner Malta has been guided and led through all obstacles that were thrown in front of it.
Our governments have been chosen wisely by a clever population.
This time round, I imagine the population has gain more wisdom through increased opportunities which the same country has provided.
I should imagine the Maltese electorate will once again rise to the occasion and after another 5 years look back and say that it was yet again another wise choice for our country and our future.
We are not saying that a new gas driven power station cannot be built or that it will collapse. It is its finance plan, the finiancial workings that will collapse.
If and when this cunning plan is implemented, the Delimara plant will have to be decommissioned during construcion and conversion.
So how will electricity be generated and supply to homes and industry guaranteed?
Is it back to drawing board or back to candles and paraffin lamps?
No one seems to have noticed that minor detail.
I mean, they keep saying they’ll ‘hit the ground running’, then what?
Then what? That’s easy! Broken ankles.
At least they’ve got the IT side of things sorted
http://www.newtechusa.com/ppi/talent.asp
Shabba.
Wwill the water desalination plants that rely totally on continuous electricity supply be switched off during contruction/conversion process?
So back to the 80s with electricity and water shortages.
The following is what’s bugging me since watching yesterday’s Bondiplus. From what Tonio Fenech said I got the following:
1. the cost of electricity generation went down when the new Delimara plant (the BWSC bit) came on stream.
2. the cost will go down further when the interconnector cable is in place.
3. production will become cheaper still if we get EU funding for the gas pipeline and can switch the BWSC plant to gas.
If this is correct, then why hasn’t the government been trumpeting this for the last 2/3 years, and explaining that its own plans will deliver cheaper electricity (or at least mitigate the rise in fuel costs)? Is it because of overcaution? Is it because they wanted the noise about the BWSC business to die down rather than keep it on the front pages?
Seems like they missed a trick here, and are now vulnerable to the New Grand Plan.
Konrad Mizzi said last night on Bondi+ that Labour have been working for two and a half years on this study. Two and a half years for a desktop study and then they want us to believe that they will be a new power plant in one and a half years.
Ghoxrin Punt is right but failed to note the essential flaw in Muscat’s reasoning. He thinks he’s the client and not the vendor.
Every time Konrad Mizzi did not have an answer, he tried to mock Tonio Fenech. This is very typical Labour.
Even when Lou Bondi asked Joseph Muscat some questions at the press conference, he tried to mock him before giving him the answer.
The worst part was when Bondi asked Mizzi about publishing all the details and Mizzi replied “Il-Ministru lest jurina kif ha jgholli d-dawl?”
Very sad indeed, if these are going to be our future minister and prime minister.
Labour is presenting the power station project in the most simplistic of manners.
The search for different means of power generation has taken a leap forward ever since the price of oil had skyrocketed.
So while heavy fuel oil made most economic sense some years ago, gas is becoming more affordable (yet still more expensive) due to large discoveries and methods of extraction.
Let’s not forget the Labour legacy in 1987 – a limping power station which was COAL fired – ask the Marsa residents.
So it’s best not to put all your eggs in one basket and the new Delimara extension generates 150 MW, while Malta’s requirements are about 400MW.
Malta would be able to balance and source whatever is more economically viable by purchasing from the European grid through the interconnector.
So all this fancy talk being thrown about LNG being imported by the shipload practically on a daily basis is just fanciful to say the least.
It’s indeed a pity that the interconnector project was not commissioned sooner, as this single alternative may indeed prove to be the most efficient solution. But everything comes at a cost, and this is 90% financed by the EU.
Funding only became available after Malta joined the EU. Tendering and procurement and commissioning take time, a full 4 years or more.
If we stayed out if the EU, as Joseph wanted, we would have no interconnector in a year’s time.
Telling me that you respect me enough as to let me see through Labour’s plans, but not enough to allow me to verify who you are is not on.
That’s it and another thing comes to mind how can such a project be run by the private sector and prices are guaranteed by the government?
I reckon that the costs for this project are around the 500 million euro bracket and no proof of feasilibilty studies or both on it and on its impact on the neighbouring villages.
You could have not put it better, Ghoxrin Punt. Spot on.
http://www.timesofmalta.com/articles/view/20130109/local/hospital.452535
“A new private hospital is opening in Qormi within six months.
St Thomas Hospital, in Valletta Road, had its soft opening this morning by Health Minister Joseph Cassar.
The hospital, in which €5 million have been invested, is owned by Caring First, which BELONGS TO FORMER LABOUR MP, CONSULTANT LOUIS BUHAGIAR.” (My capital letters.)
“In his address, Dr Cassar said that he was very pleased that Dr Buhagiar felt that the situation in Malta was economically strong enough for him to take up this investment.”
Very well said, Dr. Cassar.
It appears that any common sense we try to display here won’t make any difference whatsoever.
Why would the PL fear people using their common sense when even The Times of Malta is applauding Joseph Muscat for what appears to me to be a lacklustre effort? I really can’t believe how misguided the editorial is.
http://www.timesofmalta.com/articles/view/20130109/editorial/The-370-million-question-or-answer-.452506
One Live currently hosting Charlie Azzopardi’s wife on their discussion program, discussing him and his “cool” dress style. Such important matters, with an election in the offing, I must say.
It would have been as easy as f**k for Muscat to come up with (and explain) a proposal whereby he simply dishes out 3,000 euros to every family to install a PV system (which would amount to the 400M euros expenditure on the super-genial idea he has come up with).
The balance on the PVs would be refunded from through EU funds. That way, he would reduce bills by 100% rather than 25%.
Shouldn’t there have been a due diligence process (deeper analysis than a presentation, involving engineers and financial consultants) before giving a guarantee and presenting the 25% reduction.
I’ve never seen such rounded up figures when a decimal percentage might easily result in millions in recuperating costs, it’s obviously rounded up for easy public consumption.
Take it from me, Noel Zahra: Joseph surely must have consulted Tony Zarb. And let’s not forget Edward (get one right) Scicluna.
But due to commercial confidentiality, Tony Zarb will issue no statements and will be silent throughout the process. The Mayors of Marsascala, Zejtun, etc will ‘sacrifice’ any additional inconvenience for the good of the country (LP)and will not be bothered with any emissions from the proposed power station.
Come on Daph…the latest power station is not made in China, and still it broke down …the Made in China myth is just that a myth…most of the latest hi tech stuff is built in China…(just ask Apple and all their Ipods and Iphones)..
The question is to whose standards are the products you mentioned made? Not Chinese, I assure you.
Let’s put it another way. Say you are in the market for an offroad SUV. Would you buy a Land Rover, a BMW X5, a Toyota Landcruiser or would you settle for a Chinese Great Wall X240?
‘Telling me that they paid for the consultancy and that I am not privy to the detail is criminal, when I am expected to give them my vote based on this one pivotal point.’
Not if Joseph’s PL has become a business corporation.
The methods coincide; the massive communications campaign, rebranding, positioning and aggressive attempts to pin competition down, are all identifying signals. The strategy can be safely defined a hostile takeover.
It has become the key to reading into this ‘Movement’. I don’t see anything else.
How telling:
1)” Any labour government is going to be the beggar on this, given the promises made, so negotiating leeway is restricted.”
2) “Commercial sensitivities only exist when a preferred supplier is already earmarked.”
Besides, just imagine the level of bullying Mepa will have to endure to sanction this mega project,which we are told has to be mailed, sealed and delivered, within two years.
I consider myself a floating voter, and I believed the Labour Party in 1996 when Malta was ruined in just 22 months.
I voted Labour then and soon changed my mind due to their unprofessional mismanagement and most of all due to the fact that what was promised by the Labour Party during those years became a nightmare to all Maltese. Many others acted like me.
The same story seems to be repeating itself this time around, with promises from Dr Joe Muscat. Oh my God. Do you think that the majority of the Maltese people are going to trust you? Again?
No way, because even though you are a New Leader, your principles are still the same.
What the Labour Party has just proposed is simply a presentation, a start up idea and nothing else.
I expect the Labour Party to produce the facts and figures of how the 9c tariff has been established.
That is how you can obtain credibility and trust. Without a doubt, the capital expenditure mentioned could easily increase by at least 20%. Everyone in business knows what I mean.
Whenever a business plan is put to practice, the initial budgets are always exhausted and an injection of funds to increase the initial capital is always required, and by the way, we are not opening a restaurant or a normal shop here, we are building a new power station and amending another one, therefore the expense would be for sure extremely high.
But in my opinion, the electricity bill is not the only issue here. The difference in mentality is a big issue as well.
While we see and hear the Labour Party crying as if Malta and the Maltese people are living in poverty. As if no one can afford his mobile phone, his Melita bill, his new car, his and his family’s holiday, no-one can afford to go and eat out during weekends, no one can buy himself new clothes, nor go to the plastic surgeon to arrange his/her lips, bum whatever.
Are these people living in Malta or in a limbo of their own?
We are just at the initial stages of this campaign but the more time passes, the more I am convinced that only one Party can lead Malta for the next five years. Now you guess which one.
“Business suppliers, in this case the Labour Party that is trying to sell its proposal to the electorate, will then make available to the client (the electorate), the detailed workings and assumptions.
Telling me that they paid for the consultancy and that I am not privy to the detail is criminal, when I am expected to give them my vote based on this one pivotal point.
Telling me that Joseph respected me enough to give me all the options, but not enough to allow me to verify those options is not on.”
Did the PN give you – a common citizen, I assume – any detailed workings and assumptions for the major projects they included in the last electoral manifesto? Smart City, the SPV for (what later became) the Renzo Piano project, the promise to reduce the income tax rate, the smart metering project, the choice of BWSC and the decision to go for HFO, the Malta–Italy interconnector, etc.?
It’s certainly in our best national interest that independent individuals with your pragmatism get the chance to analyse such proposals properly. You make valid and well-argued points, unlike the PN propaganda machine which was set on auto-response to spew the typical uninformed drivel mere minutes after the proposal was unveiled.
It’s just that I think certain accusations, such as the above, are unfair, unless they are levelled at both sides.
One minor difference which you insist on ignoring is that we do not need 800 megawatts.
Nor can he ignore international tendering procedures.
You’ll soon realise that it’s all an excuse, alibi, to get rid of his pledge. No one’s talking about the bills anymore.
I am not defending the need for Labour’s new power station.
I am not in a position to do so because I do not have access to any information on current and forecast demand of electricity in Malta. Maybe they plan to feed the surplus electricity back in the European grid through the interconnector? I cannot know.
Anyhow. I am simply saying that this whole ‘show us your documents!’ argument is unfair.
@ Qeghdin Sew re: selling surplus electricity made in Malta to the European grid.
We are building the inter-connector with Europe in order to obtain cheaper electricity.
Are you proposing selling more expensive Malta made electricity to Europe?
You think that European buyers are that stupid?
Why generate expensive surplus electricity, anyway?
Maybe Scicluna is trying to sell the concept? Not surprising.
Excellent piece, well thought out and presented.
However, the great unwashed, to whom little Joey is pandering, only read headlines (if they can read). Little Joey’s ‘Lie of the Century’ is portayed in the local rags as ‘Twenty Five Percent Off’.
January sales anyone?
I have some major worries, apart from other technical ones (such as what will happen after the 10 years are up – we are stuck with privatised electricity supply, that’s what. Even the first 10 years mean privatisation, really).
1. Joseph Muscat is so smug when he says that he has just the companies to invest in the project that I cannot help feeling that he knows who will be investing. This is not a happy situation because, in all honesty, I’m thinking that it is Sargas all over again, dressed up differently. What if Joseph Muscat REALLY knew who these companies were and he has already struck a deal with them at the cost of selling of our electricity supply?
2. Who would be so stupid to invest over 500 million (because the 360 million in exclusive of gas tanks and the mode of getting gas to Malta) without expecting the world in return? Who is so rich in Malta as to afford that amount of money? He said that even persons in Malta have expressed an interest? John Dalli perhaps? We know that John Dalli is and was chummy chummy with JM.
3. Could it be that the studies are not available because they give away who the investors would be?
4. When JM was asked yesterday whether the investors were a “done deal” he said no, but he was shifting in his seat. Classical body language of a liar.
5. Another very worrying thought is that the time frame given for the completion does not seem to have included the 18 months tendering process. Could it be that JM’s zeal in having found an investor has lead him to forget that a project of this magnitude would require a European tendering procedure? Does JM realise how difficult it is for companies to reach the specs required? Does he realise that many times a tendering procedure of this magnitude is not adjudicated in one hour? It may take months, if not years, for the specs to be met and so on.
I really smell a rat. Something is definitely afoot. I am not a conspiracy theorist and abhor conspiracy theories but all this farce smacks of a fait accompli. I could not help the sensation which assaulted me yesterday that Joseph already knew who the company investing in the project will be, or who the Maltese person will be. I found it most uncanny that Joseph spoke about a Maltese person. Who, in Malta, has connections with people in the gas industry? I can think of a couple, but, let’s face it, it is not a very large number of people.
This whole situation is disquieting me. I might be imagining things – also because I would not trust Joseph Muscat with my pet budgie let alone with the energy policy for an island such as ours – but something is afoot. Am I the only one feeling this?
GHOXRIN PUNT: you made some assumptions which render your well-written comment somewhat redundant.
You assumed that this promise of a 25% reduction in tariffs was made by normal people.
You assumed that Muscat, Scicluna, Mizzi et al, are above board economists.
You assumed that someone within the LP knows what a ‘PowerPoint’ presentation is.
You assumed that the people for whom the LP’s proposal was aimed at possess the most rudimentary analytical skills.
You however forgot that the principle of “The end justifies the means”, negates any up front and honest information one could safely rely on.
Pity.
You are right but remember that 60 million have recently flown out the window.
Ah kevin, but I am not asking you for your vote.
If anything, all that I ask is that you think a teeny bit before you give your vote to Joseph.
Surely you do not need to know who I am just because I ask you to think.
Eur500 million investment to be paid back in 10 years, excluding fuel costs, mean Eur50 million per year from the Maltese people, equivalent to Eur500 per family per year to pay back the new plant.
EneMalta still has to pay for the Delimara plant and the loans that covered its deficits, another Eur800 million.
That will become about Eur1500 million over 20 years including interests accrued over that period, another Eur750 per year per family.
The fuel costs, wages and running costs still need to be paid. And 25% reduction in bills is being promised?
I will only be convnced if these costs are challenged by the workings Mizzi says he has.
Konrad Mizzi l-bierah fuq Bondi+ qal li ma jistghax jippubblika d-dettalji biex ma jnaqqasx il-bargaining power ma’ investituri FUTURI kemm huma lesti li jaqsmu mill-profitt.
Fir-rejalta kixef kollox. Qal li: (1) l-produzzjoni se tiswa 9c6/unit; (2) li se jghati €77M (?) fi tnaqqis lill-konsumatur; (3) li se juza €110M (?) biex ihallas l-investiment u jghin lil Enemalta tqum fuq saqajjha; u (4) li se jrahhas il-kontijiet ezistenti b’25%.
Might as well jghidilna d-dettalji.