Inefficient work practices seen as part of the problem

Public Investments Minister Austin Gatt said yesterday that he felt that poor work practices at Enemalta's Gas Division were part of the cause of the current shortage of gas cylinders.

Replying to questions in Parliament by Labour MPs Stefan Buontempo and Joe Mizzi, the minister said Enemalta had withdrawn a consignment of 10,000 gas cylinders after finding them to be defective, even though they were certified as safe. A new consignment is expected to arrive in Malta in the coming days.

Nonetheless, the minister said, he was not convinced that the current shortage was caused only by the withdrawal of that consignment from the market.

He felt that Enemalta should have insisted, or should have insisted more with the GWU that procedures for the refilling of cylinders as the gas depot were speeded up.

Work practices were old and he was sure that even with the current equipment, productivity could be drastically raised once the corporation and the union discussed a change of the work practices. Although some measures had been taken, he felt more could have been done to reduce consumers' frustration. Indeed, he would personally take this up with the union if necessary.

Replying to other questions, Dr Gatt confirmed that the importation and distribution of gas and petroleum products would be liberalised from January 1, 2006. The core role of Enemalta was the production and distribution of electricity, he said, and the corporation only became responsible for gas and petroleum following nationalisation 30 years ago.

The government felt the best way for the future was through liberalisation or the engagement of strategic partners for those sectors. He was not sure if, in a liberalised environment, Enemalta would be able to compete on its own in view of its outdated work practices and surplus workers.

Asked by Mr Mizzi whether the price of gas cylinders was set to rise, Dr Gatt said the poor work practices and excess workers in the Gas Division were a reason why the selling price of gas was not realistic. The current low price meant that the government had to provide a Lm 1.4 million subsidy for this sector. A decision on the situation next year would be taken when the Enemalta estimates were discussed at the end of the year. If the sector was liberalised, the government could opt for a public service obligation contract to keep the price low and a subsidy would be given.

Mr Mizzi observed that Enemalta could face further problems in power generation and distribution if the Petroleum Division, which was profitable, was hived off.

Dr Gatt said the profits from the Petroleum Division were not enough to cover the losses from the electricity sector. Profits from the Gas Division could be converted into a tax in favour of the government which could then give a subsidy through a public service obligation contract.