Former PM Muscat’s Controversial Testimony
In a startling revelation, the Daphne Caruana Galizia Foundation recently claimed that former Prime Minister Joseph Muscat misled the Public Accounts Committee (PAC) during his testimony last month. This controversy revolves around the LNG (liquefied natural gas) Supply Agreement that his Energy Minister, Konrad Mizzi, had signed with Socar, the state energy company of Azerbaijan, on behalf of Electrogas Malta Limited.
Muscat's Appearance Before PAC
On August 29, 2023, Joseph Muscat was called to testify before the PAC regarding the LNG Supply Agreement. Specifically, the PAC questioned why Muscat’s government had not disclosed the state guarantee to the European Commission. Muscat, in his response, cited a report by the Daphne Caruana Galizia Foundation, claiming that his government had kept this guarantee hidden from the European Commission. He insisted that the EU Commission had “full visibility of all the information.”
The foundation swiftly reached out to the European Commission to verify the accuracy of Muscat’s statements. However, the European Commission’s response contradicted Muscat’s claims, revealing that while they were aware of the possibility of a Security of Supply Agreement, they had not been informed of its existence or its content, as Muscat had implied in his testimony.
The Hidden State Guarantee
The response from the Directorate-General for Competition (DG Competition) of the European Commission is as follows (emphasis added): “Regarding DG Competition, Malta submitted a notification in June 2016 related to the Malta Delimara Gas and Power Energy Project, in which Electrogas Malta Limited (“EGM”) committed to supply electricity and gas to Enemalta (SA.45779). Some of the aid reported by the Maltese authorities had already been granted, and therefore, the case was registered by the Commission as relating to non-notified aid.
“On January 11, 2017, the Commission adopted a decision approving the notified measure. Specifically, the contractual structure, as reported by the Maltese authorities for the development of the Project, involved: (i) a Security of Supply Agreement (“SSA”), (ii) an 18-year Power Purchase Agreement (“PPA”), and (iii) an 18-year Gas Supply Agreement (“GSA”).
“This was complemented by an Implementation Agreement (“IA”), whereby EGM agreed to finance, design, construct, own, operate the LNG regasification facility and the new power plant Delimara 4, and to transfer these to Enemalta at the end of the term (see recitals 33 to 46 of the public version of the Commission decision).
“The beneficiary of the aid was the developer of the Project, namely the company Electrogas Malta Limited (“EGM”), as specified in recital 47 of the Commission decision. A possible agreement between the Government of Malta and Socar was not part of the notification to the Commission and was therefore not assessed in the Commission’s decision.”
Response from the European Commission
The European Commission’s response provides a clear picture of the situation. The Security of Supply Agreement between the Maltese government and Socar was not included in the notification to the Commission and was consequently not evaluated as part of the Commission’s decision.
Implications and Conclusion
The revelations brought forth by the Daphne Caruana Galizia Foundation raise significant questions. Joseph Muscat, the former Prime Minister of Malta, appears to have provided erroneous information during his testimony before the PAC. These revelations could have far-reaching political implications and call for a thorough examination of the events at that time.
What is the LNG Supply Agreement?
The LNG Supply Agreement is a contract between Electrogas Malta Limited and Socar, the state energy company of Azerbaijan, aimed at ensuring energy supply to Malta.
Why was the state guarantee not reported to the European Commission?
The European Commission did not receive notification of the state guarantee, as explained by the Directorate-General for Competition.
What could be the consequences of these revelations?
These revelations may have political repercussions, warranting a comprehensive investigation into the events of that time.
Who is Joseph Muscat?
Joseph Muscat is the former Prime Minister of Malta who was involved in this matter during his tenure.
What role did Electrogas Malta Limited play in this matter?
Electrogas Malta Limited was the company that signed the LNG Supply Agreement with Socar and was involved in Malta’s energy supply.
What is the Directorate-General for Competition of the European Commission?
The Directorate-General for Competition is a department of the European Commission responsible for competition matters and aid control within the EU.
What significance does the Malta Delimara Gas and Power Energy Project hold?
The Malta Delimara Gas and Power Energy Project provided the framework for various agreements, including the LNG Supply Agreement.
What is Enemalta?
Enemalta is the state-owned energy supply company in Malta.
What was the objective of the Security of Supply Agreement?
The Security of Supply Agreement aimed to ensure energy security in Malta and reduce dependence on external energy sources.
Are there any ongoing investigations into this matter?
It is possible that further investigations into this matter may be conducted to clarify the exact circumstances surrounding it.