Updated: New tariffs will raise costs three-fold - MHRA

(Adds MEA reaction)

The Malta Hotels and Restaurants Association (MHRA) this afternoon added its voice to a chorus of complaints over the proposed new energy tariffs, saying it expected costs to rise three-fold as a result. It said it would convene an extraordinary general meeting on Tuesday to discuss the issue.

“The options presented last Wednesday will be extremely damaging to the tourism industry and furthermore MHRA cannot understand government’s admission that no social and economic impact assessment was necessary in the light of the new tariffs being proposed,” the association said.

“MHRA is convinced that the proposed measure will increase operational costs three-fold. There will be a substantial increase in costs due to the increase in tariffs themselves, the increase in cost of materials purchased from local manufacturing firms that will also have their costs increased and the impact of upward pressures on wages.

“Ultimately the MHRA believes that such an upward pressure on costs at a time when the industry is bracing itself for a potential drop in demand due to the international economic situation, is going to lead to very serious problems in the industry. The MHRA predicts the loss of a high amount of jobs and closure of a number of hotels that simply will not be able to operate any more under this new tariff structure. The consequence on many small businesses that also depend on hotels will be very substantial.”

The Malta Employers’ Association in a separate statement called for social dialogue to be respected if the government expected the social partners to participate in finding solutions to the country’s problems.

"The social partners have been completely left in the dark about the developments, which, if not amended, will have serious repercussions on companies, particularly manufacturing and hotels and may result in a significant loss of jobs," the MEA said.

It also objected to the retroactive timing of the change in tariffs and the removal of the capping, and insisted on immediate consultation to explore alleviating measures to mitigate the serious negative social and economic impact of the revised tariffs.

"While the principle of a level playing field with competing manufacturers abroad is acknowledged, it must also be understood that Maltese employers face numerous drawbacks when compared to their counterparts in other EU countries. For example in spite of supposed reforms and promises to the contrary, port charges have remained much higher than that paid in mainland Europe."

The association proposed that the social partners be given adequate time to formulate a reaction to the planned measures to prevent an economic slowdown.