ANNUAL REPORT 2011 and Financial Statements 2010
ANNUAL REPORT 2011 and Financial Statements 2010
ANNUAL REPORT 2011 and Financial Statements 2010
TABLE OF CONTENTS Company Profile
5
Board of Directors
6
Executive Chairman’s Message
7
Electricity Division
9
Petroleum Division
19
Gas Division
23
Information Communication Technology
25
Human Resources Division
27
Corporate Services
33
Commercial Division
37
Finance Division
39
Financial Statements 2010
43
3
ANNUAL REPORT 2011 and Financial Statements 2010
COMPANY PROFILE Enemalta Corporation offers a broad range of services to the industrial, commercial and domestic sectors in the energy field. Set up in 1977, the Corporation undertakes a broad range of operations, incorporating the importation and distribution of petroleum products as well as the generation and distribution of electricity to all sectors of Maltese society. Throughout the years, the Corporation has been instrumental in pioneering the usage of new technology to reach its corporate objectives whilst at the same time offering better products and services. With a workforce of nearly 1,500 employees, Enemalta plays a significant role in the economic development of the country, contributing towards the growth of both the industrial and commercial sectors by strengthening the island’s infrastructural base. The last few years have seen the Corporation extending and consolidating the electricity transmission system whilst upgrading its generation facilities. At the same time, Enemalta is bracing itself to face the challenges of globalisation and a fast developing new world economy. Today, the Corporation is becoming more focused on environmental considerations to create a safer and more sustainable habitat for the Maltese people.
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BOARD OF DIRECTORS Executive Chairman Louis Giordimaina Secretary Noel Buttigieg Scicluna Directors William Spiteri Bailey David Xuereb Vivienne Galea Pace Pauline Millo Charles Ebejer Paul Buttigieg Angelica Micallef Trigona Alexander Lauri
ELECTRICITY DIVISION
6
7
ANNUAL REPORT 2011 and Financial Statements 2010
ELECTRICITY GENERATION All of the demand for electrical power on the Maltese islands is supplied by two power stations; the Marsa Power Station (MPS) and the Delimara Power Station (DPS). The Marsa Power Station is the older station, which commenced generating power in the mid sixties and which has a nominal total power output of 267MW. The Delimara Power Station started production in the early nineties and its total power output is that of 300MW.
reducing the overall emissions generated by both stations. The Corporation is continuously striving to improve its operations, including emission levels. In January, trials were carried out with new low NOx burners on the two largest boilers which generate over 50% of the total generated power by the MPS. These were very successful since a 40% reduction in emissions was registered. In June these measures were also introduced on two other boilers which generate 25% of the total, and again the NOx levels reduced by over 25%. Therefore by mid year the NOx emissions from the Marsa Station were reduced by 30%.
The total power output of both stations stands at 567MW. By the summer of 2012 the Delimara Power Station will be extended by eight new diesel engines, increasing capacity by 144MW. This will give Enemalta the chance to stop using Boilers 3 and 4 at the Marsa Power Station. As soon as the interconnector to the European Grid is commissioned, the decommissioning process for the Marsa Power Station can begin. The Peak load registered this year was 414MW, an increase of 3.5% over last year, but still 4.6% lower than the highest recorded in 2007. However, the downward trend which was being registered since 2007 was broken. The same applies to power generation. This year the total generated is estimated to rise to 2177GWh which is 3% higher than the previous year, but still 5.9% lower than the 2312GWh which was generated in 2008. However, once again the downward trend which was being registered since then broke in 2011. These downward trends may be attributed both to the rise in tariffs and also to the introduction of the localised renewable energy systems, subsidised by the Government. The increase registered this year is also attributed to the fact that the shock of the rise in tariffs has been absorbed and overcome by the consumers and therefore an increase was foreseeable. This rise is expected to continue next year.
8
At the Marsa Power Station every effort is being made to keep the units shut down on cold stand by. This is being carried out for two main reasons; to reduce the working hours of its units and to reduce the overall emissions emitted by both stations. Such an operation regime also reduces the overall efficiency of
the Marsa Station, because to better distribute the hours of all the units equally, they are run or shut down immaterial of their efficiency. However, this negative effect is balanced out through the positive effect of having to run the CCGT at Delimara to compensate, thus
Since the decommissioning of the Marsa Power Station will start in the coming year, major investment in the plant is kept to a minimum. However, maintenance works are still carried out to keep the machines running. All the plants at Marsa are kept in good operating conditions by means of regular inspections, overhauls and maintenance. Where applicable, salutatory inspections of pressure vessels, boilers and safety equipment were carried out. The same applies to the turbines and their auxiliaries, where preventive maintenance was performed in order to prevent any forced shut downs during the year especially during the summer months. Unfortunately, running maintenance at the MPS is increasing, because boiler tube leaks, condenser tube leaks and HPH tube leaks are occurring more frequently, implying an ageing plant.
installed. This resulted in a further reduction of NOx emissions and better start up performance of the boiler. The combined Cycle plant was being used more extensively in 2011 in order to ensure that the emission targets are achieved. Maintenance works were also carried out on a routine basis in order to ensure the reliability of the plant. The most significant projects carried out at the Delimara Power Station include: ■ Inspection of the 33KV switchgear by the OEM. ■ Upgrade of the DCS HMI (human/ machine interface) from the Maestro system which had become obsolete and unsupported to the 800xA system. ■ Hot Gas Inspection on the Gas Turbine GT3A of the combined cycle plant. ■ Overhaul of Phase 1 CWP. In the third quarter of 2011 Operators from the Marsa plant were deployed to Delimara to start training on the new plant which is expected to start operations in summer 2012.
At the DPS, during an overhaul of Boiler 1, in January 2011, a new design of swirlers similar to those already installed on Boiler 2 were
9
ANNUAL REPORT 2011 and Financial Statements 2010
SYSTEM GENERATION FIGURES Actual
Estimated
2010
2011
971,655
996,212
6,918
3,020
771,720
822,809
TOTAL GENERATING CAPACITY MWh Generated Marsa B Stn (Steam) MWh Generated Marsa B Stn (Gas) MWh Generated Delimara Stn (Steam)
GENERATING PLANT DATA 2011 Plant
Commissioned
Capacity MW
Running Hours
MWh Generated Delimara Stn (Gas)
29,508
13,453
MWh Generated Delimara Stn (CCGT)
333,311
330,446
2,113,112
2,165,940
121,623
125,158
1,991,489
2,040,782
System maximum demand (MW)
400
414
System maximum demand (MVar)
158
154
308,081
312,643
2,802
1,217
Total MWh Generated MWh Generated
% of System’s Requirements
Units consumed in Stations (MWh) Units sent out from Station busbars (MWh)
MARSA STATION (STEAM) 1 - F Tosi
1966
10
2 - F Tosi
1966
10
90
3 - F Tosi
1970
30
5,624
FUEL CONSUMPTION (Mt)
4 - F Tosi
1970
30
6,995
Heavy Fuel Oil (Marsa)
5 - GE (1956)
1982*
30
5,245
Gas Oil (Marsa)
6 - GE (1956)
1983*
30
6,055
Heavy Fuel Oil (Delimara)
207,987
218,936
7 - Ansaldo (1956)
1984*
30
7,065
Gas Oil (Delimara)
10,575
5,005
8 - CA Parsons (1959)
1987*
60
8,137
Gas Oil (Delimara CCGT)
69,650
67,785
997,360
45.82%
FUEL RATES (KG/KWh)
MARSA STATION (GAS)
Steam Units Marsa
0.317
0.317
9 - GEC Alsthom
Steam Units Delimara
0.270
0.267
Gas Turbine Unit Marsa
0.405
0.387
Gas Turbine Unit Delimara
0.358
0.394
CCGT
0.209
0.203
Steam Units Marsa
79.07
74.42
Steam Units Delimara
85.20
89.00
Gas Turbine Unit Marsa
39.69
42.71
Gas Turbine Units Delimara
46.30
41.00
CCGT
65.40
72.90
Steam Units Marsa*
26.03
26.09
Steam Units Delimara*
31.02
31.35
Gas Turbine Unit Marsa
20.64
21.59
Gas Turbine Units Delimara
23.32
21.19
CCGT
38.19
39.31
1990
37
210
2,190
0.10%
DELIMARA STATION (STEAM) 1 - BHEL
1991
60
7,328
2 - BHEL
1992
60
7,990 809,719
37.20%
DELIMARA STATION (GAS) 1 - John Brown
1995
37
410
2 - John Brown
1995
37
470 11,475
0.53%
DELIMARA STATION (CCGT) 1 - GT Nuovo Pignone
1999
37
3,848
2 - GT Nuovo Pignone
1999
37
5,359
3 - ST Nuovo Pignone
1999
36
5,690
* Refurbished Plant
10
PLANT CAPACITY FACTOR %
STATION THERMAL EFFICIENCY %
355,761
16.35%
2,176,505
100.00%
* Efficiency calculated on Net CV
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ANNUAL REPORT 2011 and Financial Statements 2010
PROJECTS SECTION The major task that was entrusted to the Projects Section was the New Generation Plant at Delimara Power Station. Following the granting of the construction permit in June 2010, construction of the plant started with foundation excavation. By the beginning of 2011, all foundations were complete and the major equipment within the engine room was installed. Work therefore started on the abatement and the Fuel oil treatment areas. The Exhaust Gas Boilers were installed in January 2011 and the FGD and Bagfilter housings were unloaded at Delimara during the same month. By the end of February, the FGDs, bag filter housings, SCRs and some of the tanks in the Fuel Oil Treatment area were erected. By the end of April, the steam turbine was installed. All major equipment was installed by end of May. Stack erection started in June and virtually all the plant was installed by September, at the end of which the first two engines were ready for starting. Most of the civil construction works were also complete at this date. The stacks were fully erected in August. The 132kV switchgear was commissioned in March. However, the main cold commissioning started in June with cold tests
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being performed on the wiring, switchgear, transformers, power cables, compressors, engine safety systems and the main control systems. Following various commissioning activities, the 132kV switchboard was connected to the main existing Holec 132kV board on 2nd September 2011. The electrical temporary supplies were then removed in the beginning of November.
DRAWING OFFICE PROJECTS SECTION The Drawing Office attached to the Projects section carried out work associated with the requirements of the Electricity, Gas and Petroleum divisions at Enemalta Corporation. Such work included modifications to drawings, preparation and the production of new drawings as requested by the respective sections.
REGULATORY PERMITS In February 2010, the first submission for the extension of the Delimara Power Station Integrated Pollution Prevention and Control (IPPC) permit was made and in September 2011, MEPA advised that a Cost Benefit Analysis regarding the new plant was required. This, as well as other information requested, meant that a consultant had to be engaged for this work. The consolidated submission was made in August 2011. The documentation related to the permit was made public in September. During this period, various meetings were held with different bodies and organisations at Delimara Power Station. Relative replies to the questions asked during these meetings were forwarded to MEPA in October. Following this process, the IPPC documentation was made public for two weeks prior to the MEPA board meeting on this issue.
DEVELOPMENT SECTION
In the meantime, the application was also submitted to MRA where it is being processed.
THE KAPPARA DISTRIBUTION CENTRE This new 132/33 kV distribution centre is located at Kappara at the old gas tank site. The
At the end of 2010, Enemalta Corporation awarded two large contracts for the installation and commissioning of a 132 kV distribution centre (DC) at Kappara and for the design, installation and commissioning of a submarine interconnector that will link the high voltage network in Malta to the European grid in Sicily. The Kappara DC is expected to be commissioned during the second half of 2012 while the European Grid Interconnector is expected to be commissioned by the end of 2013. In order to achieve these two important milestones in the development of the HV network, Enemalta embarked on a number of support projects aimed at extending the 132kV network to Kappara and to Mag˙tab where the terminal station for the Interconnector will be located.
distribution centre will receive power at 132kV from Delimara Power Station and will distribute it to the 33/11kV Msiera˙ DC, New Hospital DC, Kappara DC, Paceville DC and Pembroke DC. Kappara DC will also provide power to the distribution centres currently under construction at Manoel Island and Pembroke. During 2011 the final works of the building for Kappara DC were completed. This work could only start in mid 2011 after the tender for the equipment was awarded and the supplier had provided details of the foundations required for the equipment. These civil works were quite extensive, but were completed as planned and in time for the delivery of the equipment and the installation works. The Project Section within the Development Section carried out the validations and approval of the system design for all the equipment to be delivered by this contract. THE EUROPEAN INTERCONNECTOR This project is by far the most important project that Enemalta Corporation has ever carried out in the development of the HV distribution network. The interconnector will bring significant changes to the operation of the power station and the network itself with the advantage of having improved reliability through the diversification of the source of supply. During 2011 the Projects Section within the Development Section provided the engineering and project management expertise on behalf of Enemalta for this contract. Furthermore this section was instrumental for the completion of a preliminary seabed survey of the cable’s route
between Malta and Sicily. This survey was necessary for the selection of a feasible route for the proposed submarine cable and for obtaining permits in Malta and in Sicily. The Projects Section was actively involved in negotiations with the Sicilian Authorities for the issue of permits in Sicily. Furthermore, the Projects Section organised technical meetings with Terna, the Italian grid operator, to determine how the Interconnector will be connected to the European Grid. The interconnector Contractor has completed the system analysis and the detailed design for the equipment to be supplied. All studies and designs were checked and amended by Enemalta, as necessary. 132 KV CABLES TO KAPPARA DC A call for offers was issued in 2011 for the installation of a 132kV cable between Kappara DC and Marsa South DC and for another cable between Kappara DC and Mosta DC. These cables are necessary for connecting Kappara DC with Delimara Power Station through the existing 132kV network. This tender is under evaluation and is expected to be awarded early 2012. MOSTA 132KV SHUNT REACTORS In the beginning of 2011, Enemalta Corporation awarded a contract for the supply of the two shunt reactors for Mosta DC to be delivered in January 2012. All engineering works in connection with this contract were carried out during 2011. The shunt reactors are necessary for the operation of the 132 kV network by controlling the reactive power flow through the network.
SCADA In 2011 the distribution centres at Paceville, Qala, Msiera˙, Bu©ibba, Comino and Tarxien were connected to the SCADA System. These distribution centres are now monitored and operated from the Network Control Centre at Marsa providing greater reliability and improved response to outages. The data engineering and the modification of the wiring in the distribution centres were carried out by the Maintenance Section. The SCADA project will be concluded in 2012 as planned. DISTRIBUTION SUBSTATIONS The Development Section commissioned 25 new distribution substations in various localities in Malta to provide electricity supply to large consumers and to reinforce the low voltage network in the vicinities. Five substations were decommissioned, three of which were replaced by new substations in the vicinity. 11KV REINFORCEMENT As part of the ongoing reinforcement of the 11kV network, four new 11kV cables were commissioned to increase the reliability of supply to Floriana, Mrie˙el, Marsascala and Safi. Furthermore the 11kV switchgear in six substations were replaced by new switchgear as part of the programme to replace switchgear that is unsafe or is nearing the end of its life span. ROUTINE MAINTENANCE SECTION In 2011 the Maintenance Section carried out routine maintenance on 100 substations and 7 distribution centres. Furthermore 135 concentrators were installed in substations for the remote reading of the new smart meters.
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ANNUAL REPORT 2011 and Financial Statements 2010
Reinforcement The reliability of the Low Voltage system has been enhanced by installing a number of low voltage feeders to the benefit of the customers. Street Lighting System Maintenance of undevolved lamps has been carried out throughout the year. Practically no new lamps have been installed.
CONSUMER STATISTS MALTA HAL FAR DC Following the failure of the 11kV switchboard at Hal Far DC in August 2010, a tender for the replacement of this switchboard was issued and awarded. Engineering works are in progress and the switchgear will be delivered in May 2012. The new switchboard will be installed by the Maintenance Section under the supervision of the manufacturer.
At the end of previous year
GOZO
2011
2010
2011
2010
237,760
233,923
24,984
24,498
Added during year
4,556*
5,053
539*
593
Disconnected during year
1,008*
1,216
108*
107
Net added during year
3,548*
3,837
431*
486
Total at the end of year
241,308*
237,760
25,415*
24,984
Leading by example, Enemalta has in 2011 launched a variety of energy efficient initiatives in various districts around the Maltese islands. These include: ■ Installation of double glazed windows at Bu©ibba and Sliema Districts.
* Including estimated averages for November and December 2011.
ELECTRICITY DISTRIBUTION
ENERGY EFFICIENCY
■ Installation of a solar water heater at Óal-Farru© District.
In 2011 the Distribution section registered 4,556 new connections to the Enemalta grid and 1,732 installations of photovoltaic systems. The Distribution section also performed maintenance on more than 86 kilometres of overhead lines and over 1,180 electricity poles. It also handled 18,190 faults reported across the islands.
■ Installation of presence detectors at B’Kara District.
INSPECTIONS CORRECT
TAMPERED
TOTAL
MALTA
GOZO
TOTAL
MALTA
GOZO
TOTAL
MALTA
GOZO
TOTAL
55,938
11,662
67,600
162
17
179
56,100
11,679
67,779
Including estimated averages for December 2011. LOW VOLTAGE MAINTENANCE BREAKDOWN MAINTENANCE
PROGRAMMED MAINTENANCE (SERVICE CABLE / BOX)
MALTA
5,178*
2,466*
GOZO
1,252*
37*
TOTAL
6,430*
2,503*
* Including estimated averages for November and December 2011. HIGH VOLTAGE OVERHEAD LINE MAINTENANCE NUMBER OF POLES
ROUTE LENGTH KM
TRANSFORMER CENTRES
MALTA
1,017
79.35
81
GOZO
163
7.15
20
TOTAL
1,180
86.5
101
The following developments are in an advanced stage of the tendering process: ■ Photovoltaic installation at B’Kara District.
Metering Revenue protection, meter replacements and inspections were carried out as in previous years. The roll out of Smart Meters is well in progress. Approximately 102,000 Smart Meters have been installed.
■ Roof insulation at B’Kara District. ■ Provision of LED low wattage belisha lights.
INSTALLATION OF METERS 1 PHASE
3 PHASE
MAXIMUM DEMAND
MALTA
GOZO
TOTAL
MALTA
GOZO
TOTAL
MALTA
GOZO
TOTAL
Installation of Meter
49,800
11,231
61,031
5,905
1,235
7,140
233
5
238
Removal of Meter
45,959
10,606
56,565
5,158
1,180
6,338
142
4
146
Net Additional
3,841
625
4,466
747
55
802
91
1
92
14
15
PETROLEUM DIVISION
16
17
ANNUAL REPORT 2011 and Financial Statements 2010
SALES IN METRIC TONNES PRODUCTS
2010
Gasoil (total)
As stated in the 2010 report, in preparation for the Privatisation of the Petroleum Division, the programme for the importation of fuel and Gasoil for the power stations was taken over by the Electricity Division. However the importation and sales figures for these two types of fuel are still being reported here. The Petroleum Division distributes fuels directly to all the service stations in Malta, part of the local industry (limited to thin fuel oil) and all government departments. It must be mentioned that due to the liberalisation of the importation and marketing operations in the petroleum field, Enemalta faced competition in the supply of EN590 diesel to the service stations from a local private importer. Unfortunately due to the temporary suspension of operation of the MOBC terminal in April of the year under review, from which Enemalta made its sales of thin fuel oil, the marketing of this product had to be suspended for the rest of the year 2011. It is expected that the operations at MOBC will return to normal during the first quarter of 2012. Through the distribution service offered by the jobbers and hawkers, the Petroleum Division supplies the rest of the industry in the Maltese Islands with its liquid fuel requirements. Fuel distribution to the service stations and industry of Gozo is also performed through the service offered by the three gozitan distributors who are also responsible to cross the channel and load their road-tanker fleets from Enemalta’s installations. As in previous years the Division continued to offer excellent storage facilities to international oil companies at its Óas Saptan
18
FUEL IMPORTS
IMPORTS IN METRIC TONNES PRODUCTS
2010
2011
PERCENTAGE % CHANGE
Gas Oil
83,120
73,975
-11.0
Diesel (EN590)
69,690
79,100
13.5
Unleaded Petrol
69,250
81,821
18.2
Jet A1
93,910
106,526
13.4
Fuel Oil
511,965
544,322
6.3
HGO
15,488
10,047
-35.1
Avgas
55
56
1.8
TOTAL
843,477
895,847
6.2
During the financial year under review a total of 895,847 metric tonnes of liquid fuels were imported for local consumption. This represents an increase of over 6% when compared to the previous year. The total quantity of fuel oil consumed at the two power stations accounted for around 61% of the total imports, just as in the previous year. However when compared to the importation figure of fuel oil for 2010, 2011 registered an increase of 6.3%. This figure is to be considered together with the importation figures for gas oil as both products are used for the generation of electricity. The amount of gasoil imported in 2011 fell by 11% from that of 2010. This clearly shows a shift towards fuel oil for the generation of electricity. The importation figures for Jet A1 indicate a drastic increase between 2010 and 2011. This increase amounted to over 13%. As mentioned earlier, this was due to the role that Malta played in the evacuation of civilians during the 2011 uprising in this country.
installation. As part of its responsibilities, the various installations at the 31st March 1979 installation in B’Buga, the Ras ÓanΩir and Wied Dalam Installations are regularly maintained whilst the one at Luqa International Airport runs to the highest international standards. Due to the humanitarian aid offered by Malta during the Libyan crisis, when the country served as a base for the evacuation of third country nationals, the sales of aviation fuel
during the first and second quarters of 2011 were abnormally high and were even comparable to the early summer months. In view of these abnormal circumstances Enemalta purchased extra fuel in March in order to be able to meet any unexpected demands.
Another product which showed a considerable year-on-year increase is Diesel. However, during the previous year, a relatively smaller quantity of diesel was imported due to stock levels held at the time. In fact the sales of diesel in 2010 surpassed the import figures. One can also notice a drop in the importation of Heating Gas Oil (HGO). This drop can be attributed to a shift towards diesel, but mostly due to the market competition that Enemalta is facing from the private industry. Another increase in import levels was experienced in unleaded petrol, which surged by almost 18% when compared
2011 83,120
% CHANGE 73,976
-11.0
Gasoil (MPS)
3,154
1,377
-56.3
Gasoil (DPS)
79,966
72,599
-9.2
Diesel (EN590)
84,548
78,567
-7.1
Unleaded Petrol
66,277
72,935
10.0
LRP
7,158
0
-
Jet A1
99,006
102,622
3.7
Kerosene
666
577
-13.4
Fuel Oil (total)
518,871
544,322
4.9
Fuel Oil (MPS)
316,034
326,003
3.2
Fuel Oil (DPS)
202,837
218,320
7.6
Thin Fuel Oil
5,057
1,422
-71.9
HGO
8,815
6,963
-21.0
Avgas
82
54
-34.1
TOTAL
873,600
881,438
0.90
to the previous year. However, although this figure is matched by an increase in sales, part of it is also attributed to healthier stock levels at the end of the year.
SALES The sales of petroleum products during the financial year under review were 881,438 metric tonnes. This is in the same level as that for 2010, with a minimal increase of 0.9%. However if the fuels sold for electricity generation were to be excluded from these calculations, the sales figures for the other fuels show a drop of 3.1% over the previous year.
As already explained above Thin Fuel Oil was only marketed in the first quarter of the year due to the temporary closure of MOBC for the rest of 2011. Thus, as expected, the sales of this product when compared to those of the previous year dropped by almost 72%. However this situation is expected to return to normal during the first quarter of 2012. A decrease in sales was also experienced in both petrol and diesel, with the largest drop being registered in diesel sales. The sales of this product decreased by over 7% when compared to those of the previous year. This decline in sales was the result of competition from other suppliers. In the case of petrol,
19
when comparing the sales of unleaded gasoline in 2011 to the total sales of unleaded gasoline and LRP in 2010 one can see a decrease of over 3%. As far as is known, there is no competition yet in the sales of unleaded gasoline, hence, this drop in sales can be only attributed to a more efficient car fleet on Maltese roads and perhaps more discriminate use of private cars by the general public. The sales of Jet A1 have shown an increase over the previous year of 3.7%. Part of this increase is due to the role that Malta played in the evacuation of workers from Libya in the first half of 2011. The sales of domestic kerosene have continued the downward trend, this time by 13%. This shows that the use of domestic kerosene is on a steady decline.
INSTALLATIONS 31ST MARCH 1979 Development works at this installation were again kept to a minimum in view of the decision to close down this installation. However emphasis was put in the upkeep of the installation. One major expenditure carried out during 2011 on this installation was the refurbishment of the vapour recovery unit which included the replacement of the activated charcoal. This improved the performance of this unit.
ÓAS SAPTAN The maintenance programme of this installation was implemented. This included maintenance on the storage area, tunnels shafts, plant and equipment.
LUQA AVIATION SECTION The Aviation section of the Petroleum Division continued to maintain its high standard. This has been confirmed by the results obtained following inspections carried out by foreign airlines and other inspection companies.
With regards to storage, the tanks available for lease have from time to time been all rented throughout the current year. Enemalta used the storage facilities of Jet A1 and Diesel at this installation to meet the 90 days security stocks directive.
This section also won the tender issued by the MIA for the refueling of aircraft at Luqa International Airport for the period 2011 to 2018.
RAS ÓANÛIR All tanks in use at this installation have now been converted to gas oil storage. Despite its age this installation is managing to keep a basic level of performance.
During 2011 the refueling fleet was strengthened by the purchase of another aircraft tanker. This vehicle was brought over to Malta from the UK free of charge by a special flight operated by the RAF. This was done in recognition of the role that Malta was playing in the evacuation process in Libya.
Tank 24, which contained waste oils for the past years, was emptied and cleaned. The contents of this tank were exported to an authorised facility after following the necessary tender procedures. WIED DALAM The filtering / water separation station at Wied Dalam continued to be used during 2011. This station enables Jet fuel to be pumped directly from Has Saptan to Wied Dalam, thus by-passing BirΩebbu©a. This offers the advantage of shortening the supply route to the airport.
GAS DIVISION
20
21
During 2011 the management of the Gas Division was under the responsibility of the Chief Projects Officer. As from January 2012 the Division is once again under the responsibility of the Chief Commercial Officer. The year 2011 was the first entire year during which the responsibility for the importation of LPG was handed over to Liquigas/Gasco, following the agreement of July 2010. Therefore during 2011 the involvement of Enemalta was limited to operating the Qajjenza storage and bottling plant on behalf of Liquigas. The workforce at the Division continued depleting due to the retirement of employees. No new employees were engaged, which means that more overtime by employees from the Electricity Division had to be
employed. The total number of employees at the Division is now down to 24 and there are between 6 and 7 employees on overtime from the Electricity Division on a daily basis. It is envisaged that the new Gasco storage and bottling plant in Beng˙isa is commissioned during the summer of 2012. Once this is commissioned, Gasco are contractually obliged to decommission the existing Qajjenza plant and take in employment with them any employees who opt not to remain in employment with Enemalta. Following this, Enemalta will be out of the LPG business until November 2041, as per the concession agreement signed with Gasco.
INFORMATION COMMUNICATION TECHNOLOGY
22
23
INTEGRATED UTILITIES BUSINESS SYSTEMS (IUBS) The programme of implementation of SAP business management software at Enemalta Corporation was completed in 2011 with the roll-out of the final stages of Business Intelligence functionality as well as the launch of a Customer on-line portal in April. With this software, Enemalta Corporation, together with the Water Services Corporation, has a comprehensive Enterprise Resourcing Planning (ERP) system in place that integrates and automates internal and external business processes and management information across all areas of the two organisations. The ICT Department has continued to work with other sections and departments within the Corporation to integrate more and more business processes into the ERP and implement new functionality when required. The Department has also built up the appropriate Business Intelligence skills and resources to cater for the Corporation’s management of information requirements. The replacement of the existing meter infrastructure with Smart Meters has continued throughout 2011, with over 117,000 meters having been replaced by the end of the year. In a number of areas, namely Mdina, Manikata, Ûurrieq, Ûejtun, Si©©iewi and Ûebbu© (Gozo) these meters have already been commissioned into the Automated Meter Management (AMM) system.
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The expansion of Enemalta’s Supervisory Control and Data Acquisition (SCADA) system and infrastructure has also progressed considerably throughout 2011 to cover 6 additional DCs. The first phase of the optic fibre infrastructure project has also neared completion with the commissioning of links between Delimara Power Station, Marsa South DC and Marsascala DC. Works on the Mosta to Mellie˙a links are almost complete, and preparatory work has started on the second phase of the project.
BUSINESS TRANSFORMATION The ICT Department has continued strengthening its Business Process Reengineering team, whose members are now fully trained in the LEAN Management methodology. The team is using this methodology to examine and revise key business processes in the Corporation with a view to improving customer service and operational efficiency. To achieve this, the team is making sure to take full advantage of Enemalta’s ICT systems and infrastructure. The main initiative, which started in 2011, is a re-examination of the New Services Process, involving District offices, Customer care, and ARMS Ltd. When coupled with the development of appropriate mobility solutions, the initiative is expected to result in a considerable improvement in the delivery of these services to the customer.
INFRASTRUCTURE, SYSTEMS AND OPERATIONS Work has continued on strengthening Enemalta’s ICT infrastructure in order that it could better support the Corporation’s systems and operations. A secondary data centre has been built at the Delimara Power Station and is expected to be commissioned early in 2012. The Department has also published a tender for its Server Virtualisation and Data Storage requirements and has started on the adjudication process. Work has continued on the centralisation of all data storage and this project is nearing completion. A new Helpdesk system has been deployed to support ICT support operations. The support team itself has been strengthened and has received additional training in order to take on first levels of support for the new IUBS systems and to manage all user access requirements. The ICT Department’s Integrated Solutions and Software Development team has continued providing specialised functionality to meet the Corporation’s requirements. Work has continued on developing GIS systems integrated to the ERP and mobility solutions. This functionality is an essential component for the maintenance of the Smart Grid. During 2011, the team has also deployed a new Corporate Intranet Portal, a Fuel Monitoring and Reconciliation system and a new Registry system as well as a number of small-scale applications.
HUMAN RESOURCES DIVISION
25
ANNUAL REPORT 2011 and Financial Statements 2010
During 2011, the HR Division continued performing its’ various activities; administering sick leave, injury leave, staff redeployment, recruitment and selection, performance management, flexitime, contracts of employment and performance contracts, vacation leave, special paid and unpaid leave, as well as specific initiatives aimed at increasing employees’ development and skills. SICK LEAVE AND INJURY LEAVE The total number of days of sick leave and injury leave that employees took during 2011 amounted to 19,902 days and 979 days respectively. The necessary managerial action is being taken as regards sick leave, with over 100 letters sent to employees who regularly take sick leave. RECRUITMENTS AND TERMINATIONS During 2011, 29 new employees have been recruited within various grades in line with Enemalta’s Capacity Building Exercises for 2010 and 2011, resulting from well over 500 interviews held. On the other hand, 43 employees retired from employment with the Corporation, 8 resigned from employment, 1 employee was medically boarded out, 2 passed away and 1 employee was dismissed. This brings the total number of Enemalta employees to 1,588 as at the end of 2011.
As a result of these changes, Enemalta has managed to maintain its’ level of service to the Maltese economy yet reducing its’ overall headcount by 26. This is in line with the Corporation’s strategy of reducing costs yet still generating and providing electricity to every business and residential customer. INCREMENTS AND PROGRESSIONS In line with the conditions of employment regulated by employees’ employment or performance contracts, as well as the provisions of the collective agreement, during 2011 there were 260 increments awarded to employees and 52 progressions to higher salary scales. EMPLOYEE CONTRACTS There were 12 new contracts signed by new employees engaged with the Corporation, and 8 performance agreements signed with employees who were successfully promoted to higher grades following the result of internal calls for applications. This is in line with Enemalta’s drive to offer employees the possibility of enhancing their career by offering opportunities for development and advancement.
HR MANAGEMENT Apart from miscellaneous requests for assistance dealt with by the HR Coordinator and the Manager, Organisational Design and Planning, there were over 200 requests with whom official correspondence was exchanged. Such requests ranged from special paid leave to unpaid leave, study and exam leave, Time Off in Lieu and requests to change work schedules. FLEXITIME There were also 259 requests for flexitime requested and approved during 2011, with employees benefiting from such a concession applying for the renewal of their flexitime concession every three months.
DONATION OF VACATION LEAVE Following the implementation of this employee-solidarity scheme during 2009, in 2011 the HR Section serviced further requests for such donated vacation leave, summarised as follows: Acknowledgments letters to doners
156 Letters
Letters to receivers
9 Letters
Rejected Letters
1 Letter
Amount of hours donated by employees
1,006 hours
Amount of hours donated to employees
900.5 hours
Current balance of hours in the Fund is
1,288.25 hours
AUDIT ON ALLOWANCE AND OVERTIME As from July 2011 the HR section started to perform an audit on the overtime and allowance paid to the employees. The results of this audit triggered the need to automate overtime and allowance through the existent HRMS system, subsequently increasing efficiency and transparency in such payments. However the Corporation is in the initial process of such automation. SPONSORSHIPS FOR STUDIES In line with the Corporation’s emphasis on employee development, a number of sponsorships continued to be given to employees, ranging from Certificate/Introductory level up to a Masters’ Degree. The Corporation’s intention is to develop its’ human resources potential, thus keeping abreast of technological advancements that will enable it to increase efficiency in its operations. TELEWORKING Up to the end of 2011, there were 32 employees making use of the teleworking concession granted by Management. During 2011, the Teleworking Committee met eight times discussing and examining in further detail the work carried out by the teleworkers.
VACATION LEAVE During 2011, there were 170 employees who exceeded their vacation leave, and in line with the provisions of the collective agreement were forwarded to the Policies and Industrial Relations Section for the necessary disciplinary measures.
POLICY AND INDUSTRIAL RELATIONS The Policy and Industrial Relations Office mainly deals with trade unions and other government bodies such as Ombudsman and PACBU regarding HR issues. The office is also responsible for all disciplinary actions of employees including disciplinary action before the Disciplinary Committee. Another important role of this office is the designing of policies and their governance. During 2011, the Policy and Industrial Relations Office handled several job description reforms – most of which have been concluded. Such reforms consisted of a number of meetings with the unions where several disputes and arguments were discussed and resolved. The job description reforms that this office concluded this year were: ■ Station Upkeep reform ■ Generation reform ■ Compliance Section reform ■ Electronics reform ■ Pneumatics reform The job description reforms that this office started working on but has not concluded yet are: ■ EPOU – this is in its final stages ■ Training Centre – job descriptions being discussed ■ Petroleum – job descriptions being discussed ■ Fire section reform – this is in its final stages ■ Service Dispatchers reform – this is in its final stages ■ Clerical – this is in its starting phase
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27
ANNUAL REPORT 2011 and Financial Statements 2010
STATISTICS OF DISCIPLINARY RECORDS FOR YEAR 2011 Medical
Lateness
H&S
Exc VL
Insubordination
Others
Total
January
9
1
Nil
Nil
Nil
1
11
February
7
Nil
7
35
1
4
54
March
3
14
6
Nil
1
Nil
24
April
11
Nil
3
Nil
2
6
22
May
8
Nil
7
27
Nil
Nil
42
June
7
Nil
3
Nil
1
Nil
11
July
7
15
Nil
Nil
1
Nil
23
August
10
Nil
Nil
Nil
1
Nil
12
September
6
Nil
3
Nil
Nil
Nil
9
October
4
Nil
3
31
Nil
5
43
November
4
1
6
Nil
Nil
1
12
December
3
18
Nil
Nil
Nil
1
22
Total
79
49
38
93
6
20
285
DISCIPLINARY CASES HEARD BEFORE THE DISCIPLINARY BOARD The Disciplinary Committee handles cases of serious offences referred to it by the management. This Committee is constituted of three persons (chairman and two memebers) who are not Enemalta employees. Two cases were heard before the Committee this year and the total number of meetings was 12. POLICIES This year the vacant post of the Policy Design Executive has been occupied and both the Policy Design Executive and the Policy Governance Executive have worked on several policies and their governance.
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TRAINING AND LIFELONG LEARNING Training in Enemalta during 2011 was dominated by the restructuring exercise which is taking place in the Generation section of both Power Stations. The principal aim of this training was to enrich the work force with more skills to attain the flexibility and multitasking approach in order to carry out tasks more efficiently. The training of staff is a long process whereby the same employee is called to attend training in different disciplines and for several hours in order to achieve an acceptable level of proficiency in one’s output. In 2011, training involved 239 employees in 46 different subjects such as electrical and mechanical trade skills, health and safety subjects, literacy,
report writing, leadership skills, people management, computer literacy, heavy vehicle driving etc. While the delivery of the training was restricted by the release of staff from their duties it is remarkable to point out how enthusiastic the participation of the trainees was. Since the training was attended by employees with different levels of education and their receptive abilities differ, customised training was created to suit the target audience in each class. The innovative methods of training that were applied showed vigour, such as when certain training was carried out using the synergistic effect. When the training of plastering and painting was held, the practical exercises took place at a local charity, giving Enemalta an opportunity to fulfill its Corporate Social Responsibility towards the local community. During the year, the Training Centre continued to support the SMART metering project by training more third party staff to execute the replacement of a larger number of meters. Another major project which continued to unfold was the Environmental Management System which was introduced through the attainment of the ISO 14001. This required the active participation of the Training Centre in organising a widespread awareness programme to most of Enemalta’s employees. Further training sessions were required to train staff in waste management and separation. It was also necessary to have employees selected to implement the project trained in monitoring and auditing the process to maintain a proper flow of processes in its execution. During 2011 the number of employees who took part in training initiatives amounted to
340. These trainees also included third party employees who carry out contractual work for Enemalta. As always Health and Safety training remained cardinal in the annual training programme and extended the knowledge in health and safety subjects across the whole spectrum of employees. While it is mandatory to know how to carry out Risk Assessments at a supervisory level upwards, awareness training has also been extended to industrial staff who are now able to recognise deficiencies in the work environment. A new initiative by the Training Centre was to organise a training course designed for the professional engineering staff to be certified as Scaffold Inspectors. The training was carried out in-house and has been accredited by the Malta Qualifications Council. In view of the privatisation process of the Petroleum Division, the need to train staff in the un/loading of fuels at the Power Stations became critical. Until recently, this has been the responsibility of the Petroleum Division. Today the generating stations are self catered to un/ load or transfer fuels with their own staff. The extension of the Delimara Power Station required the training of the maintenance and operating staff on the new plant. This training was planned to run over a period of 5 months in which time the trainees are exposed to the operation of the new generating plant. A number of employees were initially taken to the supplier’s factory to receive training there, but the majority of the training was carried out at Delimara Power Station. Besides this training, the Training Centre organised on-site training for heavy vehicle drivers who are to transport raw and processed materials which are used in the generating plant.
For the sixth year running the Training Centre has maintained its computer training programme in order to support the Corporation’s plan in computerising its operating systems. More advanced training has been undertaken due to the introduction of the Geographical Information System (GIS) for the electricity cable networks which has been installed in all the Enemalta District Offices and Drawing Offices. Further training which has been successfully running for the last three years was the continuation of evening classes for all Enemalta employees in Electrical Licenses A and B. This training has been attended after normal working hours and has been an opportunity to strengthen or diversify the knowledge in the electrical trade. During 2011, the Training Centre has managed to train 1,344 employees in one or more of the 85 courses provided. These figures show an increase over the previous year, in which 1,086 employees were provided with 65 courses.
WELFARE The Welfare Section believes that the wellbeing of employees is imperative to the health of the Corporation. Maintaining the welfare of employees renders a more productive workforce. During 2011 the Welfare Section strived to develop a wellness strategy that best suits the needs of each individual employee. The Welfare Section range of services include the following: CORPORATE SOCIAL RESPONSIBILITY The Corporation coordinates corporate social
responsibility activities such as fund raising activities and Istrina and Dar tal-Providenza Campaigns, where employees are encouraged to give a small donation from their salary. SOCIAL/SPORTS/RELIGIOUS ACTIVITIES The Football and Clay Shooting Team represent the Corporation in various competitions throughout the year. Moreover Social Activities include barbecues and carting events. The Welfare Section regularly organises religious activities along the year. Confession service is available on the first Friday of each month and Holy Mass is celebrated during Christmas and Easter time. Lenten Sermons are also organised during Easter time. ONE TO ONE VISITS WITH EMPLOYEES During these visits several employees share their work related and personal problems. This section helps employees sort out personal issues they may be encountering in their lives. Moreover the Welfare Section provides solutions and assists employees with work related problems by liaising with their respective superiors. SUGGESTION SCHEME Through the “Ag˙ti Idea” Scheme employees have the opportunity to submit ideas and suggestions. The Welfare Section believes that this suggestion scheme encourages employee involvement and improves efficiency within the Corporation. HEALTH INSURANCE SCHEME The Welfare Section liaises with the Health Insurance representatives in order to provide an adequate health insurance to employees and their families. The Corporation contributes
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by providing a free health insurance scheme to all employees. Employees can include their families in the scheme and the respective deduction is made from their salary on a monthly basis.
ASSISTING EMPLOYEES WITH HEALTH ISSUES The Welfare Officer visits employees who are hospitalised providing moral support to both the individual and his/her family.
EMPLOYEE ASSISTANCE PROGRAMME Employees are provided with an Employee Assistance Programme, which provides solution for employees with personal and work related problems, which they may experience from time to time.
The Welfare Section believes that with the implementation of such programmes the Corporation’s workforce will be motivated, which will result in the creation of a more positive work environment.
WELFARE BOARD The Welfare Board is responsible for the Welfare Account. The only income of this account comes from the rent of the canteens at MPS and at DPS. Moreover the Welfare Board is also responsible for the Donation of Leave Fund. Employees who are in need of vacation leave can forward a request to the board so that they may benefit from the Donation of Leave Fund. The Welfare Section encourages all employees to donate Vacation Leave so that the Welfare Board can help employees in need.
CORPORATE SERVICES
30
31
ANNUAL REPORT 2011 and Financial Statements 2010
REGULATORY AFFAIRS The Regulatory Affairs Office’s (RAO) work during 2011 included several activities related to energy and environmental regulatory obligations of the Corporation. One of the highlights of the year in which the RAO staff participated very actively together with other sections of the Corporation was the complete implementation of the Environmental Management System (EMS) project and its successful outcome in achieving ISO 14001: 2004 certification in August by IQNet and its partner CISQ/CERTIQUALITY S.r.l. This project started in 2007 when Enemalta applied for the Integrated Pollution & Prevention Control (IPPC) permits for the Marsa and Delimara Power Stations. An EMS is an obligation of these permits and therefore the Corporation embarked on the task of planning, implementing and running an EMS programme for these installations. Enemalta went even further to include the Distribution network, stores and district site offices within the programme. Moreover, although ISO certification of the EMS is not obligatory, the Corporation opted to achieve this certification as proof of its environmental commitments. Following the hiring of consultants to assist the EMS team, the project started in earnest back in mid 2008. The project involved carrying out an environmental impact assessment and gap analysis, the setting up of various official top-management approved documents, such as, an Environmental Policy, a Management Manual and several Management and Standard operating procedures. Moreover, Monitoring Plans were established,
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improvements on the existing legal obligations documents implemented, and several internal audits were carried out. It is also important to mention that a waste management system was planned and implemented, and decisions where taken on an Environment Improvement Programme that will ensure that the Corporation moves further than its minimum legal obligations. Training, an important obligation, was also delivered to many Enemalta employees in all aspects of the EMS. The RAO is now responsible for the running of the EMS. Another activity in which the RAO was actively involved was the application for revisions to the IPPC permit of Delimara, in view of the installation of the new diesel engines. This culminated in the issue by MEPA of the revised DPS permit in early December, following the second public hearing. The RAO started the initial coordination of the application together with the new projects technical team in 2009. The application was the subject of many discussions with MEPA, the compilation of several reports and a public consultation process. Moreover, given the delicate nature of the application, additional consultancy work had to be hired by the Corporation. In every stage, the RAO supported the Technical team and senior management in the application and achievement of its successful conclusion in the issue of the revised permit. The RAO, together with the management of the MPS installation, has also submitted a request to MEPA for several changes to the IPPC permit of MPS. The RAO also participated in external audits related to the IPPC permit of DPS as requested by MEPA.
The RAO also prepared the greenhouse gases (GHG) emissions reports for MPS and DPS, their verification by Bureau Veritas (Greece), and the submission of verified reports to MRA. Preparation, issue, and adjudication of a tender document of a period contract for the hiring of approved verifiers for years 2011, 2012 and 2013 was also taken in hand. Moreover, following the installation of new diesel plants at DPS, the RAO carried out revisions in the Monitoring and Reporting Plan related to GHG emissions reporting for DPS, as a consequence of discussions with MRA. For this scope, a draft M&R Plan was submitted to MRA for approval. In addition, the RAO also prepared revisions in the GHG emissions permit for DPS. The RAO was also actively involved in implementing the obligations of the MRA license that came into force in the beginning of the year. This involved considerable coordination work with the various sections of the Corporation, and ARMS Ltd. Finally, the RAO regularly prepares the reports associated with the IPPC permits and submits them to MEPA, apart from its regular reporting obligations to NSO.
TRANSPORT SECTION This year Enemalta’s Transport section continued upgrading its fleet. Tenders for ten new light vehicles and four small vans were awarded. These vehicles replaced vehicles which were being hired for use by the district offices. Although these tenders required a capital investment it meant that in the long run Enemalta will save on recurrent costs utilised for vehicle hiring.
Another tender for ten new tower ladder trucks was also awarded. These vehicles are equipped with the latest safety technology available. A prerequisite of the tender specification highlighted the need for these vehicles to be Euro-V compliant which means that such vehicles consume and pollute less than other non-certified vehicles. These trucks replaced other ageing vehicles. An in-house software package has been developed and is now being utilised for fuel allotment, therefore allowing for computerised records and statistical reports to be produced at the touch of a button. In concrete terms this means that the transport section is in a better position to plan for preventive maintenance on vehicles and in the process save money from repairs. The introduction of this software package means that all transport section records are now computerised. The corporation also monitors fuel usage through the GPS positioning system installed on all service vehicles. Another tender document is being drafted, this time for four automatic vehicles to be used by employees with light disabilities. This capital expenditure will also mean that recurrent fees for hiring such vehicles will be discontinued. The Transport section is also responsible for the refueling of vehicles with unleaded petrol and diesel blended with 5% bio diesel. Two hundred and seventy (270) vehicles refuel from the Marsa Power Station fuel pumps. They are consuming a total of 140,000 litres diesel and 190,000 litres unleaded petrol annually. Recently a transport pool service was launched by which messengers are being
utilised as drivers and transport resources are better managed. As a result a significant improvement in fuel economy is being registered and fewer emissions are emanating as a result.
LIBRARY AND ARCHIVES The Library and Archives section’s mission statement “Preserve to Serve” clearly indicates the level of commitment this section is aiming towards when preserving historical documents, sometimes dating back to the 1940s. The major aim of this section is to collect, index and catalogue the entire reference material of the Corporation. The inventory today is comprised of 26,159 books, standards, reports, contracts, and journals. This is a significant increase compared to last year’s figure of 25,790 publications. During this year a number of theses by Enemalta employees and other students were added to the Melitensia section. Also this year; initiation projects were launched to restore a collection of documents which were left at the Corradino Naval Power Station dating back to the seventies and are now at the Library. An important project was initiated this year to ensure that historic VHS videos are digitised and converted to digital DVD format and therefore better preserving such documentation for future generations. Cataloguing work on more than 4,000 photographs continued, some of these photos date back to the 19th century, highlighting historical events related to energy use in the Maltese Islands.
Apart from the library functions, this section is also responsible for the archiving processes within the Corporation and manages around 84,000 Corporation files. Contact between Enemalta’s head librarian and the Government’s National Archivist is maintained regularly and this section strives to ensure that all national legislation and recommendations related to archiving of documents are adhered to.
HEALTH AND SAFETY Enemalta’s Health and Safety Section aims to ensure that employees operate in the highest standards related to local Occupational H&S Laws and related EU directives. Safety campaigns are ongoing and include on the job training, courses, posters and information on the intranet continuously updated to ensure that employees have full access to the related H&S services that this section provides. The Health and Safety Section strives to minimise injuries. This is achieved through continuous inspections of all Enemalta premises to ensure that they abide to all related laws and to ascertain that Standard Operating Procedures are observed when Corporation employees are working in different locations in the Maltese Islands. Two clinics at the Marsa and Delimara power stations ensure that first aid is provided immediately in case an employee is injured. Medical assessment of employees falls under the jurisdiction of this section and employees are routinely medically tested to ensure that they are physically capable to perform their duties without any risk to their health.
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ESTATES MANAGEMENT The Estate Management Section was set up in 2009 and is responsible for the Corporation’s Immovable Property Management Section and for the Projects Section. During this last year the Immovable Property Management Section continued working on the compilation of an immovable property register, is working actively on the Debt Restructuring Programmes and has worked on various contracts (some of which were long outstanding) relative to electricity substations. With regard to the Projects Section, refurbishment work at the Marsa Power Station and the Delimara Power Station Administration Buildings as well as at various District Offices continued at a fast pace, most notably four district offices and the main Customer Care building in Marsa where renovated to ensure that customers are welcomed in modern office spaces. Emphasis was given to the energy-saving aspect of all buildings during the planning stages of such projects. Around 20 such projects were undertaken this year.
FIRE PREVENTION SECTION This unit is comprised of 10 fully trained and qualified fire fighters. Through continuous training these employees are specialised in providing fire-fighting and rescue backup in any type of emergency that may arise at Enemalta’s premises.
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This unit continuously provides fire cover to high risk operations and liaises with other Government authorities on fire, safety and related matters. During this year this section responded to a number of emergency situations successfully, including first aid assistance to injured personnel, fuel spills and fire containment near strategic installations to prevent further dispersion. This section continuously participates in life-like drills and exercises aimed to test the preparedness and ensure that personnel are ready to respond to such events as natural catastrophes, flooding, chemical spills, gas leaks or major fires inside and around Enemalta premises. Prevention of such incidents is also the prerogative of this section. Routine maintenance on specialised fire fighting equipment and extinguishers around all Enemalta installations is performed. The Fire Prevention Section also ensures that fire protection equipment including alarms, emergency signs, evacuation plans and routes are maintained. Emergency training to Enemalta personnel is also delivered.
SECURITY The security section is entrusted with protecting Enemalta’s installations as per the Critical Infrastructures and European Critical Infrastructures (Identification, Designation and Protection) Order, 2011 Legal Notice 434 of 2011. Enemalta’s installations are considered to be major strategic locations in Malta and play a vital role in ensuring that the Islands are supplied with its energy requirements and the security for the provision of such services.
Training and modernisation of the security function within Enemalta has been given a priority during the last years, whereby Ports Facility Security Officer Certification was completed successfully. Security Guards were also required to undergo professional security officer licence training. In-house training was also organised, continuously testing the preparedness of personnel in case of any type of emergency. Drills related to medical emergencies, fire, bomb threats and terrorist attacks were also held regularly during this year in collaboration with major government agencies, such as the police, armed forces, hospital staff and civil protection.
REGISTRY SECTION This year an in-house custom-made software package started to be utilised by the registry section. This software package is web based, therefore it offers easier and faster data access, better security and a permission based system which may be implemented in the near future. An average of 170 new files are being created every month. More than 179,000 files are circulating or archived at Enemalta and the registry staff handles an average of 7,000 queries monthly.
COMMERCIAL DIVISION
35
PROCUREMENT During 2011 the Procurement Department published a total of 98 tenders. A total of 7,409 orders were issued for a total cost of €39,606,776.80. These were divided as indicated in the table. Relationships with the Department of Contracts and with the Direct Orders Section of MFEI were strengthened. Through these relationships the Procurement Department acts as the watchdog for the strict adherence to the Public Procurement Regulations in all purchases made by the Corporation.
CONTRACTS The Contracts Section was strengthened to its full compliment of one Head and two clerical staff. A major drive to ensure that all contracts in place within the Corporation are filed with the Section was made in 2011. This project was completed during the same year. A mechanism by means of SAP to ensure that the Section is made aware of new contracts immediately upon award was also established. The section is also responsible for the management of bid bonds and bank guarantees. To date there are 444 contracts filed with the section ranging from supply contracts, service agreements, works agreements, sales agreements, fuel purchasing and fuel supply contracts, power purchase agreements, lease agreements and more. During 2011 the Section handled 148 bank guarantees and 86 bid bonds.
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QTY
TOTAL COST
TYPE OF PURCHASE
118
€8,133,587.46
Tenders
4126
€2,697,641.98
Direct orders < €6,000
189
€24,360,002.10
Direct orders > €6,000
2574
€1,722,924.53
Purchases < €6,000 made through requests for quotations
402
€2,692,620.73
Purchases made through period contracts
7409
€39,606,776.80
SALES The Sales Section is responsible for the issuing of quotations for third party recoverable works and for the establishment of works agreements for such works. The section also handles power purchase agreements through which the Corporation purchases the energy generated to the national grid from renewable energy sources. During 2011 a total of 227 quotes for a total sales value of €4,881,667 were issued. Out of these 53 works contracts were concluded for a total value of €1,613,479.
The total stock turnover in these four warehouses was of €16,401,729. This was divided into €8,422,139 of stock issues and €7,979,590 of stock receivables. The total closing stock value of these four warehouses is €33,905,408. This means that the stock turnover during 2011 was of 48%. This is a good value considering the large percentage of strategic spare parts for the generating equipment that is held in stock. In fact the total value of strategic spares is €16,372,286 (€7,672,574 at Marsa and €8,699,712 at Delimara), or 48.3% of the total stock value. If the value of strategic spares is included from the total stock value, then the effective stock turnover amounts to 93.5%.
74 power purchase agreements were signed during 2011.
STORES The Stores Department comprises the four main warehouses of the Corporation, namely, the Marsa Generation Stores, Delimara Generation Stores, the General Stores (Distribution) and Corradino Stores (Development).
FINANCE DIVISION
37
ANNUAL REPORT 2011 and Financial Statements 2010
During the financial year 2010, the Corporation continued to build on the introduction and implementation of its management information system. The assignment of resources to key processes within the system has enabled the reporting of timely information in order to take corrective action where this was deemed necessary. Various control systems continued to be introduced for the year under review which consisted, amongst others, revised user access rights to the key transactions in the respective modules, guidelines communicated to other officers within the Corporation on the requirements by Finance and other project related controls which enable the correct recording of transactions whilst limiting the possibility of human errors during inputting. During the year under review, management information was presented to top management in a fast-paced manner. The timely submission and presentation of management information undisputedly serves to tackle deviations from budget hence improving on overall performance where remedial action is identified.
Given the high price of oil in 2011 which had its effect on Enemalta, close scrutiny on the Corporation’s cash flow was of paramount importance. Periodic (weekly) cash projections were presented in order to assess the liquidity requirements of the Corporation’s operations whilst at the same time ensuring that both working capital and project related commitments were in fact being honoured and in line with contractual obligations. The continuous updating of such liquidity positions and forecasts triggers the need for tighter credit control measures which are administered by the third party contractor engaged by the Corporation, namely ARMS Ltd. Through the compilation of relevant data, one can report instances where the overall cash position would merit immediate corrective action to smooth out peak and troughs.
FINANCIAL RISK MANAGEMENT The financial markets are often characterised by high volatility, which creates a lot of uncertainty in the markets. Therefore, price fluctuations should be constantly monitored. Enemalta’s risk management function primarily centres on oil prices and FOREX rates. Throughout the meetings, various decisions are taken and the right hedging targets are set. Hedging decisions are established upon a complete assessment of the various significant variables and fundamentals affecting the markets and also based on market outlooks published by different esteemed banks. In this process this financial arm of the Corporation takes a proactive role in facilitating decisions.
In 2011 Enemalta hedged 66% of its fuel exposure using a swap structure, locking its price at an average level of $80.87/bbl against the market average level for 2011 of $110.83/ bbl. This swap structure provided an element of stability in devising Enemalta’s tariff model. Moreover, by locking in prices through swaps, Enemalta gains greater control over its inherent variable fuel costs and achieves complete price protection from any increase in crude oil prices. 2011 has been a very volatile year, with front – month Brent prices ranging from a low of $93.33/bbl in early January to a 36-month high of $126.65/bbl in April. As at December, ICE Brent prices averaged $110.83/bbl, a 38% increase compared to the 2010 yearly average of $80.00/bbl. During 2011, Enemalta recorded a hedging gain of around $75 million. This has enabled Enemalta to mitigate losses. It also marks the largest hedging gain in the history of the Corporation. In 2011, Enemalta hedged its dollar requirements at an average rate of $1.3634 against an average market spot rate of $1.3917. Enemalta registered €3.4 million in EUR/USD hedging losses during 2011.
Over the period running through July 2010 to December 2011 the audit for financial years 2008, 2009 and 2010 were concluded along with other major developments running in parallel. Through continuous and relentless efforts by key personnel, the Finance Department managed to close three audits in twelve months, a feat that enabled the Department to bring Enemalta in line in relation to Corporate Reporting. This major improvement has also been acknowledged by Standard and Poor’s in its latest report on Enemalta.
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39
FINANCIAL STATEMENTS
41