Tista' taqra bil- Malti.
Alfred Camilleri, the permanent secretary at the Finance Ministry, highlighted that he was highly concerned with the issuing of the bank guarantee to the Electrogas consortium.
Testifying on Friday morning, during the public inquiry into the murder of journalist Daphne Caruana Galizia, Camilleri was questioned by Dr Jason Azzopardi about emails which were sent after he had requested an urgent meeting after hearing from the banks that Electrogas was defaulting on its loan repayments.
The emails exchange between the stakeholders including the then Minister of Tourism Konrad Mizzi but excluded the finance ministry.
In one of the emails, which was read out in court by Dr Azzopardi, Yorgen Fenech told the other partners in Electrogas that ‘I think this is a good wake up call for GoM [Government of Malta]’. When asked what Fenech meant by that line, Camilleri could not reply, saying he was unaware of the emails and that finance ministry was doing its work.
- The public inquiry has been informed that its mandate has been extended until 15 December;
- The Board of Inquiry received a heavily redacted copy of the bank guarantee agreement from the Minister of Finance
- The banks did not accept the Security of Supply Agreement because it did not have clearance from the European Commission;
- The state guarantee to Electrogas Consortium was only issued in the absence of the Security of Supply Agreement;
- The bank notified the Finance Ministry that Electrogas was defaulting on its payments.
Just over a month before Daphne Caruana Galizia was assassinated, Bank of Valletta informed the Finance Ministry about the ‘existing and continuing’ default and that the Electrogas consortium had asked for a waiver of this default.
The bank also informed the ministry that the Security of Supply Agreement and the Conversion Term Agreement were not signed and therefore a condition of the Facility Agreement was not satisfied. Camilleri told the court that he took immediate action, calling an urgent meeting for Wednesday morning.
"It's so redacted that we can't read anything," Judge Mallia remarks.
The witness says that he did not give any advice to this effect.
According to the emails read out in court, the stakeholders held a meeting with the bank [the Mandated Lead Arranger – MLA – a bank which brings other banks together] a day before the meeting with Camilleri.
The email by the bank was received on 4 September 2017, just over a month before Daphne Caruana Galizia was killed.
Camilleri, had requested the urgent meeting within minutes after hearing from the bank, Dr Azzopardi points out.
Now, Dr Azzopardi moves on to a thread of emails which did not include the Ministry of Finance, but included Ralph and Markus from Siemens, the Minister of Tourism Konrad Mizzi and his permanent secretary Ronald Mizzi, Thurab Musayev, Gasan, and Catherine Halpin among others.
Markus from Siemens sent an internal email asking how they should react to the email sent out by Camilleri. He also suggested that they hold a meeting with MLAs.
Half an hour later, Yorgen Fenech replies to Siemens, keeping Catherine Halpin among others.
Dr Azzopardi reads out:
"Dear Markus, Mark [Gasan] and I are away.
I think this is a good wake up call for GoM"
The lawyer points out that in this case GoM would mean government of Malta, asking the witness what Yorgen Fenech might mean by the last line.
Camilleri says he would not know since he does not know about these emails.
Camilleri, says that it concerned the loan agreement. He says that it was at the end of the bank guarantee, adding that he was always afraid of default.
The witness says that one would not expect a default in such an advance state.
In the email, Brinkworth had pointed out that Electrogas had requested a waiver from the banks, Dr Azzopardi reads out. Further in the email, Bank of Valletta informs the government that the security of supply agreement and the conversion term agreement were not signed.
Dr Azzopardi asks whether he was given a reason why the security of supply agreement was not signed.
Camilleri says that those were a commercial decisions. He adds that he had acted immediately because he was concerned about the email he received from the bank.
The meeting was sometime in August, he replies.
Camilleri says that he was never given an explanation as to why Mizzi who was no longer responsible for the project since it fell under a separate ministry, met with the Finance Minister.
"It was a political decision," he says.
"The security of supply agreement was promised in September 2013.
It was cleared by the state aid monitoring board.
The banks did not accept it because the EC was not notified and had not approved it.
The Energy Ministry was involved, not the ministry of finance
The security of supply agreement was signed after approval."
The EU Commission approved it in August 2014.
Camilleri says that he believes that by then the bank guarantee had been lifted.
Dr Comodini Cachia asks when was the bank guarantee lifted.
30 November 2017, he replies.
She remarks that the owner of 17 Black was revealed on 30 October 2017, a month before.
Camilleri says that the investigative officers were handling it. He reiterates that he always had his concerns regarding the issuing of a bank guarantee.
Camilleri says that the ministry would receive reports on the project's progress while the banks would receive other reports.
Camilleri says that on 4 September 2017, he was informed that Electrogas was defaulting on its payments. He held a meeting on the 6 September with all the stakeholders.
The bank guarantee was extended around the snap election.
The buck always stops with the government, he replies.
Dr Comodini Cachia remarks that this is not the question.
He says that the finance ministry is only involved if the government is made to pay.
He says that when he would Mizzi, Minister Scicluna would be present. He was involved in technical meetings.
Asked if they had discussed the financial stability of the investors, Camilleri says no.
The consortium's financial standing report was prepared independently by an auditor and was not provided by the Energy Ministry.
Chief Justice Emeritus Said Pullicino remarks that we are in situation where there have been several incidents in major projects.
Camilleri says that he got to know that Gasol had dropped out of the consortium from the press, and they acted immediately.
Camilleri says that the guarantee mentioned in that minute concerns Enemalta which was later discarded.
One bank guarantee: €110 million – this was from 19 December 2014 until 30 August 2015. The loan was extended on 28 May 2015 with 27 million to amount to a total €110.
A second bank guarantee was issued 28 July 2015.
Camilleri says he wouldn't know because there were many people present.
"He was present at the meetings concerning the budget," Camilleri says.
Camilleri starts narrating again from 2013. He says that on a security of supply agreement not a penny would be paid.
"We were left with the bank guarantee option," he says.
He says that the government had a credit line from one of the Maltese bank involved of €150 million, a €100 million buffer from the treasury, and €110 million from various government accounts, in case something happened.
He says when discussing the guarantee, the banks – HSBC, KFW, Societa Generali and BOV – 'had an army of lawyers'.
1. Credit worthiness – which includes a technical test carried out by an audit firm.
2. the amount
3. a time limit
4. state-aid approval
5. a market price – to compensate for the aid given by the state.
6. For a €110 million loan, the government can only guarantee 80% of the loan.
Camilleri explains his concerns and says that he ascertained that it was a legal move.
In mid-2014, the 'nuclear option' was mentioned. A bank loan to the chosen company, he explains, adding that first the idea of a bridge loan was floated around.
The first bank guarantee in December 2014 – an interim bridge loan, which was approved by the Cabinet.
Camilleri says that he was concerned about giving out a bank guarantee to a private company and a project which was not under government's control, and he would insist that such decisions would be approved by the whole cabinet.
"These risks always worried me," Camilleri says.
The chosen bidder could have worked using the security of supply agreement and the state aid clearance, the witness says, the banks required that it is cleared with DG Competition.
The witness says that he got to know about the Programme Implementation Board from the NAO's report. He explains that in September 2013, the Programme Implementation Board issued a security of supply agreement. This, he explained, that since the country would always need energy, then the government would step in.
A bank guarantee would need clearance from a state aid perspective either through the monitoring board or the EU Commission. For legal certainty, it would land before the the EU Commission.
He explains that the tendering process then started. Those bidding, noted that Enemalta which was in precarious financial state, was proposing to give an 18-year contract for the buying of fuels, however the bidders were questioning Enemalta's financial strength. Camilleri explains that bidders wanted some peace of mind.
Camilleri adds that the government had a stock of €1.6bn.
"Downgrade means downgrade," Camilleri tells the board.
He says that in 2013, there was a global financial crisis and the oil prices were high.
Camilleri explains that major direct orders are approved by the Contracts Department.
It was always the same, he claims adding that the allegations were always the same – corruption and lack of transparency.
Camilleri sits on the Public Accounts Committee.
He reiterates his reply, 'ask the person who made such claims'.
'Don't ask me about kitchen cabinets, because I wouldn't know,' he replies.
Camilleri apologizes and says that questions should be directed at someone else.
He says that the ministry provided the money.
Mr Justice Said Pullicino asks if the ministry just dishes out the money.
Camilleri says that the decision would be taken at a cabinet level.
Camilleri says that the due diligence is carried out by the ministry.
'I never attended kitchen cabinets. I only went to four cabinet meetings – these included the meeting on the powerstation state guarantee,' Camilleri says.
'The finance ministry essentially facilitates the projects,' Camilleri says.
Camilleri says he started off as a clerk, and then continued his studies at the university. He returned from the UK and given his background in statistics he was tasked with various work.
In 2006, ahead of the introduction of the Euro, he was appointed as permanent secretary to the Finance Ministry.
Camilleri has been a permanent secretary at the Finance Ministry since March 2006.
The witness takes the stand.
On Wednesday, former Projects Malta chair Adrian Said and one-time Projects Malta deputy chair William Wait testified. The latter told the court that the government had paid €700,000 direct order to an architectural firm for a project at the former ITS site that was never carried out.
During the sitting both Said and Wait had told the board of inquiry that Camilleri would be present at Projects Malta board meetings on behalf of the Finance Ministry.
In a previous sitting, Finance Minister Edward Scicluna had described a “kitchen cabinet” under former disgraced prime minister Joseph Muscat as being responsible for the major controversial deals. Scicluna had lamented that Projects Malta lacked transparency.
The public inquiry into the assassination of journalist Daphne Caruana Galizia is tasked with determining whether the state did all it could to prevent the assassination.
The board of inquiry is chaired by Judge Emeritus Michael Mallia, and composed of Chief Justice Emeritus Joseph Said Pullicino and Madame Justice Abigail Lofaro.
Lawyers Therese Comodini Cachia, Jason Azzopardi, and Peter Caruana Galizia, assisted the family.