Gas Division privatisation

The recent announcement that Enemalta's Gas Division is being privatised, and will in future be managed by a joint venture between a local and an Italian company, raises important questions that can affect consumers who use this commodity extensively.

The Labour Party has no objection in principle to the privatisation of this utility service, so long as the consumers' interests are protected and it is economically and socially justifiable.

What we are talking about here is the granting of monopolistic trading conditions to a private company whose main interest, understandably, is the optimisation of shareholders' return and maximum profit. All this is happening in a context in which hard-working Maltese families are already facing the consequences of spiralling energy costs, which increasingly are being passed on to the consumers without the mitigation of subsidies as was the case in the not- so-distant past.

Many had in fact resorted to the use of gas for heating their homes since it was a well known fact that this was more cost effective than the use of electricity or even kerosene. Before the last general election I had specifically asked the government to declare what its intentions were regarding the future price of gas because it was public knowledge that gas was being sold below the cost of production.

As was to be expected from an Administration that was always economical with the truth, the government failed to comment on, or reply to, my question. This was hardly surprising knowing how well this Administration has used stealth as a political weapon to deceive the unsuspecting electorate. Now the chickens are coming home to roost.

It is being rumoured that the price of a gas cylinder needs to increase substantially if the new operators are to break even in providing this commodity. Of course, they will rightly expect to earn a decent profit for providing this commodity to all Maltese households.

The minister responsible for Enemalta and the government in general continue to be silent about this issue. They fail to reassure the Maltese public how they are going to protect us from the risks of unreasonable price increases that can so easily come about under private monopolistic conditions.

We also do not have any indication of how the social impact of the hefty price increases that are expected in the price of bottled gas will be mitigated. This assumes more significance in the case of those who can least afford to pay for such a basic commodity. As usual we will probably wake up one morning and hear the minister responsible for Enemalta present us with a fait accompli on the final terms agreed with the new operators of the Gas Division.

This is, of course, not the way that a truly democratic government should treat the citizens it was elected to serve. These changes are going to affect the lives of thousands of Maltese households that are already struggling to make both ends meet in the present tough economic climate.

The MLP will therefore keep up the pressure on the Gonzi Administration to reveal its plans on how it intends to safeguard the consumers' interests when the provision of gas becomes the responsibility of a private monopoly. We do understand that, as much as possible, the price of gas should reflect the cost that is involved to produce it but we are equally conscious that, as politicians, we are responsible to ensure that the consumer gets a fair deal.

We will be particularly vigilant to ensure that the weakest members of our society are not pushed aside and expected to cope with costs that they cannot afford for basic commodities that are essential for a decent living.

We therefore appeal to the government to come forward with details of its economic and social plans relating to the privatisation of the Gas Division to ensure that the opposition and the public have an opportunity to scrutinise these plans as is the norm in truly democratic societies.

Futhermore, we assume that the regulator responsible and the consumer protection wing of the government will ensure that the transfer of a monopolistic situation from the government to private interest will not exacerbate a monopolistic market situation or a dominant position to the detriment of the consumer.

Dr Mangion is the Leader of the Opposition

cmangion@keyworld.net