Taxpayers set to foot the bill for more debt left behind by Streamcast

The Court has ordered Streamcast to pay Enemalta more than €150,000 for unpaid works and electricity bills, although it will probably be taxpayers who will have to foot the bill as the ‘investors’ behind the failed data project cannot be traced.

This is the second ruling in favour of Enemalta after the failed project, that was meant to generate millions in investment, instead left a trail of debt behind.

Streamcast was lauded in 2018 as ‘a major international company’ that would invest €75 million in the launch of an international data centre in Malta. It got the backing of the government, with former Minister Konrad Mizzi even turning up in Mumbai, India, and attending a press conference by Streamcast.

According to the latest lawsuit, Enemalta was engaged by Streamcast to provide special infrastructure at Streamcast’s rented premises (also from Enemalta) supposedly to be ‘used’ as a data centre. The infrastructure together with related electricity bills cost the state electricity provider some €150,000.

The latest court order follows other and larger outstanding bills which Streamcast left behind.

Last February, The Shift reported that Enemalta had filed a lawsuit against the company claiming over €300,000 in rent arrears and other costs while Melita, a private company, is owed another €300,000 for the provision of internet services. Streamcast also defaulted on a promise of sale agreement for a property valued at €7 million.

In total, Enemalta claims that it spent over €500,000 in order to set up Streamcast’s data centre (including rent) and supply it with electricity and internet. However, despite various invoices, calls and legal letters for payment, Enemalta never received a cent from Streamcast and had to resort to the courts.

Worse, it transpired from Court filings that Streamcast representatives effectively absconded from the island leaving the rented equipment running unsupervised. It was only late last year, when an overheating alarm went off at Marsa, that Enemalta realised that there was no one left here and that it should, both physically and metaphorically, pull the plug on the whole thing.

The problem is that while the Court has now ordered Streamcast to pay up its dues, no one really knows who will be forking out the money as none of the company directors can be found and it is not clear what assets, if any, remain in Malta.

This will mean that Enemalta will eventually have to write off these unpaid bills as bad debts, which will have to be covered by its own clients and main shareholder – taxpayers.

A due diligence report commissioned by Malta Enterprise had warned about Harshawardhan (known as ‘Harsh’) Sabale, the man behind the failed Streamcast investment, according to a leaked report seen by The Shift. Yet he was still offered the lucrative deal.

Enticed towards Malta by disgraced Energy Minister Konrad Mizzi, Streamcast was launched in a choreographed ceremony presided by former Prime Minister Joseph Muscat. It was presented to the public as an example of how Enemalta got “turned around” with the old disused power station in Marsa, being transformed into a state-of-the-art “tech hub”.

However, as soon as the cameras turned, everything fizzled out and the promised €75 million investment was transformed into a mountain of debt.

An investigation by The Shift stripped the Streamcast deal of the hype and showed individuals with a dodgy track record who came from nowhere, without a data centre, infrastructure, funds, a track record or even a proper website.

Yet they were still offered a lucrative deal in yet another of Mizzi’s projects in which taxpayers got the short end of the stick, as happened with other controversial deals involving the Electrogas power station and the sale of three public hospitals for just €1.

The Shift had also uncovered how Nexia BT – the closest audit firm to the OPM – had invested in Streamcast (through another company) before its operations were sold to third parties, presumably for a neat profit.

Nexia BT was the same company that opened secret Panama companies for Mizzi and Muscat’s closest associate, Keith Schembri.