Tag: Energy

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Energy

That China Connection

1. From Closed Shop to Open All Hours

In 1405 the Great Emperor Yongle sponsored a massive mission of world exploration that would be captained by the explorer Zheng He. The boats used by these expeditions were among the largest sail powered boats the world had ever seen – by comparison Colombus’ three vessels when he set off for the Indies would measure one-eighth of the Chinese behemoths). This Age of Chinese exploration was brief. The expeditions went far and wide and magnificent gifts were brought back from places such as Malindi in Africa (most memorably a giraffe). The next Emperors though believed that such explorations were a waste of public expense and China would soon close in upon itself and clam up to the world (including an outright ban on sailing ships).

Fast forward to  1793 Lord Macartney made a trip to China in a bid (sponsored by Mad King George) to convince the hermit power to open up to European trade. Emperor Qianlong fobbed off the British entreaty towards openness (See the rather interesting reply here) and while ordering King George III to “tremblingly obey” his wishes Qianlong maintained what would be a short lived policy of closed-shop. The main reason imputed to Qianlong’s decision was that China already had everything it needed.

Fast forward again and watch how in gradual steps starting in the nineteen-eighties Deng Xiaoping, Jiang Zemin and Hu Jintao transformed China’s outlook towards the world. The giant nation is now a huge force to be reckoned with and is bulging with economic muscle that can be flexed around the world. This time there should be no turning back…

2. Ma Tagħmlu Xejn Ma’ Dr Joseph

Which brings me to the current government’s sudden trysts with the Chinese behemoth. In the run up to the election we already had a Labour delegation scooting up to the new land of opportunity presumably to prepare the preliminaries for deals should they get into government. Nothing wrong in that, at all. The media exercise in recent days has been such as to highlight the fact that Chinese Investement is sought after across the continent and not just by the Taghna Lkoll government. Such news is brilliant for the non-discerning voter of course – and all it took Joseph Muscat was a little trip to a sort of Economic Forum in Dailan China (a sort of young leaders exercise mainly intended to promote China and Chinese economic clout).

The Bulgarian and if I am not mistaken Finnish Prime Minister also attended this little chat to a mostly empty room in Dailan. Attendance was not important from the Maltese perspective though, what really counted were some sound clips from Muscat such as the fact that Europe lacked real leadership or the assumption that “EU PM’s agreed that Chinese investment is important”. The impression given by the press bytes back home was that there was an impromptu EU28 meeting of heads of state in Dalian and that the leaders had all agreed to issue a statement confirming the importance of Chinese investment.

It’s not that Chinese investment is not an attractive opportunity. Not at all. The CIC that basically manages $200 billion in dollars of foreign reserves for the Chinese government and is constantly injecting capital into public and private projects (Joseph Muscat did mention their foray into Thames Water as an example of special national services being sold to the Chinese). “As of August 2013, the CIC has 575.2 billion in assets under management.” (Wikipedia)

One type of investment occurs when Chinese companies buy into European counterparts. I drive a car that’s nominally Swedish (a Volvo) but the manufacturer is owned by Geely Automobile who bought it off another non-European company called Ford. American today, Chinese tomorrow – capital wise that is but still Swedish safety and know-how. So the Chinese companies are attracted by the expertise and know how of the company they are ultimately purchasing. Back in China the purchasing company gets additional credibility through its collaboration. Luxembourg’s Cargolux was under scrutiny for a similar kind of buyout only last week.

Then there is the Maltese MOU with the Chinese authorities. We should premise that nothing is certain about what was exactly agreed and that we have to wait for the details to be stamped out – presumably in a decent parliamentary debate (without the excuse of economically sensitive information shrouding the whole exercise). The first glaring inconsistency in this “investment” is that in the economic world you do not get something for nothing. So if we do know that the Chinese are paying €200 million into Enemalta we need to know what they are getting in return.

Moody’s seem to know more than the media in this respect, here is what they said in their latest report:

In addition, the government recently announced that it had signed a Memorandum of Understanding with the China Power Investments Corporation (CPIC), one of the five largest state-owned electricity producers in China. As part of the agreement, Shanghai Electric Power, a subsidiary of CPIC will become a minority shareholder in Enemalta, providing the Maltese utility company with a cash injection that will improve its financial position. Enemalta and CPIC also plan to set up a joint venture to produce photo-voltaic units for sale in Malta and across the EU, which would help Malta reach its renewable energy production targets,while providing China with a foothold in the European solar energy market.

Another initiative between both parties is the setting up of a Energy Service Centre that will cater for the maintenance and service of energy production plants in Southern Europe, Turkey, the Gulf and Africa, a venture that is likely to further boost economic activity in Malta.

So if Moody’s are right then the CPIC will provide the “cash injection” and in return set up a “joint venture” to produce PV units in Malta (apart from the Energy Service Centre). Which brings me to the balancing out part of the equation. So the Maltese government has effectively charged a Chinese company 200€ million in order to “allow” it to set up shop in an EU Territory and break into the PV market that is worth trillions of euros last I checked. It does not stop there. The 200€ million give Shangai Electric Power a stake in one of our most important assets – Enemalta – effectively limiting our sovereign independence where energy is concerned.

Many more questions need to be asked about the PV manufacturing plant in Malta. Hopefully these will be done in the right forum in Parliament. Meanwhile the optimism among the Labour crowd is palpable. Joseph Muscat has got Malta a “deal” like some latter day Mintoff and brought much needed money to the Enemalta purse. At what cost though? Are we fully aware of the risks involved and of what really has been sold to the Shangai Electric Power?

As for Moody’s report. It just calls a spade a spade. IF the Labour promises do work out then the outlook is deemed to be good. Call me negative if you will but the most significant paragraph in the report is the following – something none of the media seems to highlight:

We do note, however, that the planned reforms are ambitious and there are risks to its successful implementation. For instance, the building of new infrastructure relies on the interest of private partners, adding a degree of uncertainty as to whether a suitable partner may be identified. Moreover, Enemalta’s financial health could be jeopardised by a premature cut in tariffs should anticipated savings be delayed. Nonetheless, we believe that the sovereign will benefit from a less volatile Enemalta and a more resilient energy sector that is likely to attract greater investment to the country as input costs fall.

Private partners can easily be found if you sell your wares for cheap or if you offer to “prostitute” your sovereignty for a measly cash-injection (Shangai Electric Power are buying into our sovereign Energy for the price of two Welsh International Footballing Superstars – and they get a foothold into the PV market to boot). True the opposition populist taunts of “China with a finger on our Energy button” are still part of the same old same old diatribe but then again other huge alarm bells begin to ring when you notice that our Energy Minister has a not too nuanced China Connection that runs in the family so to speak.

Add to that the wanton nonchalance with which this labour government seems to want to appoint personnel in the diplomatic and economic fields on the basis of what can only be described as nepotism and you can begin to piece together a not so rosy picture.

This government was elected with promise of cheaper light, it seems to be rushing headlong into a tunnel of darkness. And this is not only thanks to the Chinese.

 

Categories
Campaign 2013

The power incumbent

Not many people have pointed out a particular aspect of the Labour party’s grand plans for energy and the utility bills. Scratch that “not many” and think “nobody”. Beyond the partisan exchanges fuelled by marketing vs marketing, beyond all that the voter wishes for (irrespective of, and notwithstanding any critical reasoning) there is a peculiar characteristic of how this particular electoral bomb has unravelled. Let me tell you what that is.

In traditional PLPN discourse, Labour’s major “flaw” in its presentation has nothing to do with the lesser (though not less important) flaws of planning and detail. The major flaw is that this is the kind of project that is normally announced, embarked upon and bungled AFTER a party is elected to government. How is that a “flaw”? Well it would have been a flaw in strategic terms because under normal electoral circumstances Muscat would have got away with his tired phrase of “Inrahhsu l-kontijiet” plus a few clues about new power sources &c &c. Instead, also thanks to the dynamics of this particular election, we got the pre-project plans (yes, even if they are desktop plans) as a taster while in full election mode.

Labour is not in government. But imagine the PN had presented its White Rocks Sports Park project, SmartCity or Arriva plans with a Manuel Delia instead of Konrad Mizzi. Imagine Delia’s powerpoint on Xarabank with all the aiding and abetting of Peppi or Lou. Would things have been different? I doubt it. Political parties do not go into detail about their plans and projects before they are elected to government for two reasons:

(1) Because they can. They can afford to be superficial and speak in glowing marketing terms while burying any serious criticism under the carpet because this is a zero-sum game. It remains US vs THEM and reason has nothing to do with why they will get the ultimate voters preference. Labour can yell all it likes about efficiency and cancer but the truth remains that no matter how many technical flaws are found in its plan many many voters have already decided to go for them – because it’s either Joseph or MorePN.

(2) Latent Incumbency. I know we normally speak of the power of incumbency BEFORE an election. Government makes use (abuses) of its powers to favour the gain of potential votes. In this case the incumbency is useful for projects once you are IN government. MEPA permits? Directives? Seveso? It’s all relative. When it’s a plan for an aspirant governor that’s one thing but when you are in government you can conveniently play around these issues. Take the much touted SEVESO Directive on safety. It’s all ok for Miles Seaman to come and tell us about the need of insurance and strict safety compliance (more than ok actually) but then where have the PN consultants and experts been when we have had firework factory after firework factory blowing up in our faces?

Had Labour been elected (or once it is elected, to make the flag waving Historians, Musicians and Porta-Pundits of the world happy) many of the serious objections to its plan (and by that I mean security, safety, environment even before I start counting Euros) would be brushed aside because once in government YOU CAN. That’s the point really that should be drummed into all the asthma sufferers in the South. Once in government MEPA permits can be pressured into being, once in government a few “managerial” words about “one-stop shop permits, fast tracking, efficiency” will easily mask lax controls and the bending of the laws to the incumbents needs.

Need more proof? Ask the birds (or better the conservationists unless you meet some particularly intelligent Myna). Sure I am scandalised when I hear Mizzi dismissing legal requirements with all his talk about focus groups, expression of intent and roadshow politics but isn’t Mizzi just giving us more of the same? Same, same just different.

There is no real control of government and its power unless you get a fluke situation like the Franco Debono / Jeffrey Pullicino Orlando trap that GonziPN and its spin friends walked into in 2008.

This blog has recently faced an increased assault of being “nationalist” or “passive” simply because it has never wavered from criticising the criticisable. At this stage in the electoral campaign we still believe that both mainstream parties are pushing gimmicks rather than policies in the most populist of manners.

A concrete, long-term energy plan in the national environmental and economic interest will never be the bastard son of this election. Instead whoever is elected will soldier on with their particular version of energy plan basted together out of god knows what interests and god knows what political point of expediency.

And guess what. You’ll be voting them in. Thanks. But no thanks.

 

Categories
Campaign 2013

Voting for Spiridion

You would not believe me but this election has many many echoes of 2008. This government is bending over backwards in order to show the voters how much change it has already brought into place and there is no doubt that some sort of progress has been achieved. On the other hand this blog was pointing out the deficiencies of an outdated electoral system, of an outdated election rules system, of ridiculous plans for voters abroad, of the race to emptiness and of the victory of relativist thinking back in 2008. In 2008 we pointed out the dangers of anything goes appeasing promises and also in 2008 declaring a vote for AD meant that you would be labelled a vote waster (at least that).

Well it’s 2013 and short of being told “we’d have loved to change things” (and should we believe them?) nothing much has changed. Forget AD and its nine candidates for thirteen districts (where there really no other possible candidates in Gozo?) for a minute. Just concentrate on the roadshow with which we have been regaled until now. We are stuck in the”energy” point of the agenda right now and yesterday’s Xarabank is as good a measure as any for the sort of discourse we are facing. I watched the first two debates and I must admit that the wrangling match of harridan yells vs confused tired metaphors between Marlene Farrugia and Beppe Fenech Adami destroyed any will I had to soldier on. Earlier we had to watch a reprise of Mizzi vs Fenech. It was anything but a debate.

It is evident by now that Mizzi (and Labour) have exhausted all that they have to say about their plan (I won’t call it magic). We will not get any more details notwithstanding the fact that the few level-headed individuals who dare brave the partisan mire to find anything more about the idea will only be regaled with a power point presentation that skims the surface and very blatantly omits details. Don’t ask Marlene about them because like Anglu (the other Farrugia) she is not technical and she will just yap away like a baritone chihuahua about “il-Maltin jahdmu”, “il-kancer” and other soundbites that are nothing more than rabble rousing. Mizzi – the techinical chosen one – is nothing better. He is like a roughly  prepared student who for a moment thought he found a short cut through the exam. Once you try to delve further he comes up with a million and one shenanigans from the “Shame on you Mr Minister” to the “Don’t Panic” (what’s with the panic fixation on both sides anyway?). His face twitches like a cross between Gollum and Wally  and his last resort is again populist rabble rousing.

Not that the nationalists inspire much confidence either. They are experts at rubbishing plans and character assassinations (hence Joseph’s “Let’s be nice to each other ” ploy which when coupled with his constant historical revisionism makes one want to retch violently all over a billboard) but have obviously got too many skeletons in their cupboard when it comes to energy. Thank God for a holistic European Energy programme that perchance requires a pipeline connection to Malta (to increase access) otherwise if it were for them we’d be moving with the painful slow conservative pace to which they have accustomed us in other fields (Cirkewwa terminal? Mater Dei? Social Rights? Electoral Reform?). no amount of arrogant scaremongering should be able to deviate the attention from the fact that the only party that has consistently and constantly had clear policies and objectives on energy and Malta’s plans for the future is the one that is given eight minutes per programme on PBS.

I say SHOULD though. Because from what I am noticing viewers are wired otherwise. The Energy plan by Labour has been greeted by the disgruntled with enthusiasm that just falls short of the flag waving jews who greeted the donkey riding Messiah on his way into Jerusalem. Even those who eventually smelt that this could be a rat waved the suspicion away with a worrying nonchalance. Their reasoning? Even if Labour’s plan is flawed it is better than the status quo. Donkey riding Messiahs wept.

I don’t give two hoots about the Nationalist criticism of Mizzi’s plan. I was ready to listen. I did my research and reading online trying to understand what he was on. Glossaries of terms became my bedside reading for a night or two. Then he looms onto a Xarabank podium and when questioned he comes up with “google it” or “fittex fil-pagna ta’ Puillicino” or worse still he quotes a comment by a retired professor on a blog on an online newspaper. So much for “intom sibtuh fil-Yellow pages”, this one does most of his research in social media. In the end the impression I got over a couple of programmes was that Mizzi had a script that was short and unprepared and that when he noticed there would be other questions he panicked. His failure to delve deeper reminded me of a forgotten politician.

But there are many who are convinced by his show. So I have a question… mainly for these people… would they vote for Spiridione Sant? Who? Spiridione. The great Spiridione Sant. Independent candidate of past elections who passed away recently. Spiridione, the one who loved to speak about Malta Taghna Lkoll (ta’ Malta u ta’ Ghawdex)  is probably busy singing the Innu Malti in heaven. Have a look at this clip (particularly from 3 minuites onward and more particularly from 4 minutes onward) and see the poor man shooting number and concepts in an evident attempt at impressing (he probably found “average” quite a managerial word). After watching think… would you have voted for Spiridione Sant? Then think. Why don’t I ask the same question about Konrad Mizzi and his plan? Am I entitled to ask for more proof?

Don’t worry though. If you really want the nationalists out of the way (or the status quo to be bettered with a faulty plan) then go ahead… Vote Spiru!