MPs keep up attack on power surcharge

MPs kept up their attack on the power surcharge when Parliament debated the Enemalta financial estimates over the past two days. Calls were also made for the corporation to improve its customer service and to provide a more reliable power supply.

Labour MP Joe Mizzi said the government had, yet again, failed to produce an energy plan despite the promises made years ago.

In 1994 the government used to say it had a 15-year plan that would cater both for supply and the environment. The government used to say that there would be no more power cuts, yet there was a power cut only recently. And nothing was now being said on renewable energy. Other countries were insisting on the use of alternative energy sources saying they had reduced their consumption by some 20 per cent.

The lack of planning was translating into higher costs, made worse by the costs which had to be incurred for Malta to meet the EU's emission targets without it managing to reap advantages from membership for this sector.

Mr Mizzi said problems were not restricted to the efficiency of the power stations and planning for future power generation. In the distribution system, several localities continued to suffer from an irregular supply, with the wattage fluctuating widely. The government had for years been speaking about a tunnel to link the two power stations in order to improve efficiency. Was this gallery ready? Wasn't this yet another example of inefficiency?

Whatever the reason for raising electricity bills, if the present government believed that the Labour Party did not have a social conscience when it raised the tariffs back in 1997, the government could not claim to have a social conscience when it was doing the same thing. The Labour government had realised its mistake and held the bills back while the present government was going ahead with issuing its bills.

Evarist Bartolo, opposition spokesman on tourism, highlighted the burden which the power surcharge had imposed on tourist accommodation.

More tourists came to Malta last year when compared to the previous year but higher local costs meant profitibility was down sharply.

There was need for the government to make a comparative study which would establish whether Malta's tax regime and other costs were competitive when compared to other destinations.

As oil prices increased, the government had taken up the easiest option, passing on much of the cost to the consumer. There had been practically no attempt to look into alternative energy. An energy policy would have enabled Malta to tackle this problem in a proactive manner.

Labour MP Leo Brincat recalled the work done by the 1996-98 Labour government to modernise the corporate structure of Enemalta. Many of the recommendations made in a study on the corporation at the time were still valid and should be implemented.

While the Nationalist government often blamed the work practices in Enemalta on former Labour governments, the PN itself had now been in government since 1987, save for a short two-year stint, and its criticism was therefore, hollow.

The report had found, among other things, that the corporation was seriously lacking in internal communication. The culture of the corporation was that all projects should be looked at in terms of demand without much commercial considerations. The report also showed that public perception of the corporation, as well as of its own workers, was very low. The corporation did not have any idea of what a corporate strategy meant. Generally, the report found a number of archaic practices with very little flexibility.

In embarking on a revamp of the corporation it was the Labour government which appointed the first CEO at the corporation.

Mr Brincat called on the government to prepare a long-term strategy which would take into account projected future consumption patterns and avenues for alternative energy.

Silvio Parnis (MLP) referred to the power surcharge and said that a mistake politicians often made was to fail to understand the financial burdens some people laboured under. Unless MPs voiced these concerns, they would be accomplices of those who failed to understand the reality.

Why did a person who faced serious social problems have to also face additional financial burden, such as in the case of single mothers of families with seriously-ill children? It was unfair that the taxpayer had to shoulder the financial problems Enemalta was facing. While Enemalta was saying that it was curbing its financial problems, it was actually shifting them to the people.

Joe Sammut (MLP) asked why the consumer, who had to pay hefty amounts for the electricity supply, was also required to pay for the Enemalta meter. Abroad, the meter was given as an incentive to acquire the service.

Unfortunately, the situation here was that regardless of whether the consumer was getting the service he paid for, Enemalta was only concerned that the consumer paid his dues.

Mario Galea (PN) said Enemalta needed to improve the system of how people could report electricity faults. Officials should give an explanation on the causes of outrages and an indication of when power was likely to be restored.

There was also need for the corporation to be more responsive to the people's needs. Some foremen ignored the people and seemed to have an ulterior agenda. Why should a person complain for a year about the need for the replacement of an old bracket on the façade of his house? Why was it that some people had to seek help from MPs for services from Enemalta? Shouldn't the normal channels be sufficient?

Mr Galea welcomed the fact that senior members of the Enemalta management recently spent a full day with the workers to be in a better position to assess their situation. The move had been appreciated by the workers.

The Nationalist MP congratulated the corporation for its new crackdown on the theft of electricity, more so since theft could be costing Enemalta between Lm7 million to Lm9 million. That 120 cases of theft had already been identified this year was very positive.

The Nationalist MP said he was in favour of educational campaigns aimed at helping the people to reduce power consumption. This would cut costs for the clients themselves, as well as for the country.

Joseph Cuschieri (MLP) said the government was not keeping its word. Last July, minister Austin Gatt had said the government may absorb the increased spending on oil purchases. Before the budget, Parliamentary Secretary Tonio Fenech promised no new taxes in the budget, but then the surcharge was raised a week before.

The government had introduced the surcharge without a serious assessment of the hardship that would be imposed on the lower strata of society. So much for the social conscience.

It was not just consumption costs that were high. A family which lived off social benefits and was moving house was being charged Lm200 to transfer its power service from one address to another.

Mr Cuschieri also highlighted the problems the tourism sector is facing because of the power costs, noting that the president of the Malta Hotels and Restaurants Association had said that increases in revenue had been fully absorbed by higher costs, notably for electricity. Energy costs per room in five-star hotels rose by over 11 per cent while in four-star hotels they rose by 16 per cent in the last quarter of 2005. This translated into lower competitiveness for a sector that was vital for the economy.

Carmelo Abela (MLP) urged Enemalta to improve its consumer services and relationship. All state entities needed to put the consumer first, especially the regulators. People were paying more for their electricity, but service by Enemalta was not improving.

Mr Abela said he acknowledged that Enemalta was not a charitable institution, but solutions needed to be devised according to local circumstances and not on the basis of what happened abroad. This applied also to competition which did not automatically lead to a better service. The consumer had benefited from competition in mobile telephony, but not in the provision of television services.

He felt the government and Enemalta should consider helping sports and cultural organisations. For a start, he felt that sports and cultural organisations should not be billed for their electricity at commercial rates.

Malta also needed to make better use of electricity. Why were schools floodlit all night? Furthermore, it was clear that some streets had excessive lighting, while others were practically in the dark.

Franco Galea (PN) suggested that the government and Enemalta should consider easing power costs for sections of the population as a means of discouraging tax evasion.

He felt that assistance for low income families should, if possible be extended but there should be frequent checks to ensure there were no abuses.

Mr Galea said Malta, because of its small size, could become an EU research centre on alternative sources of energy.

The country itself needed to promote transport systems that ran on renewable sources of energy.

While everyone hoped that Malta would strike oil, there was also need for a strategy to reduce Malta's dependence on oil.

The Nationalist MP welcomed the works being carried out by Enemalta to improve the power distribution system, including the opening of new distribution centres.

Noel Farrugia (MLP) said a new tariff regime should be drawn up so that the socio-economic problems the people were facing did not excalate further. The government should shoulder a greater part of the burden to relieve the people.

It was not true that the government could do nothing about the surcharge. Successive Nationalist governments had repeatedly promised more accountability but had failed to address inefficiencies at Enemalta which were now being passed on to the people with the excuse of the surcharge.

The high surcharge was affecting cash flow in the country and eating away at profits.

The government was throwing the country's competitiveness out of the window.