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.
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Paul Camilleri
Oct 4th 2008, 07:41
Whilst it is true that it is not feasable to have air conditioners powered by PV cells, there is also the possibility of solar cooling. With regards to converting the Marsa power station, the technology in solar power generation is still in its infancy with only two to four plants in the world. Unfortunately it seems that nuclear is the future.
l borg
Oct 4th 2008, 01:26
to mr tony borg
the hotels that closed were cheap 3 stars
the jerma hotel was sold as a huge profit
Loïc Le Brun
Oct 4th 2008, 00:04
@ Mr. John Borg
Dear Mr. Borg, do you really believe that there is a "harsh competition" on the Maltese market? Come on, mostly, you will find monopoles, duo poles (both public & private), and many cartels or so-called "gentlemen agreement" (illegal).
On the international scene, it may have an effect on the Tourism industry as a whole but please note that in our globalized world, everyone is suffering just the same. Regards, Loïc
Julia Sciberras
Oct 3rd 2008, 23:49
I would like only to clarify one small comment.....Restaurants are not exempted from paying full energy bills, unless forming part of a Hotel. What we call Hotel's restaurants. While the other mostly familly run restaurants, they pay the full tariffs like you and me.
John Borg
Oct 3rd 2008, 21:59
The government is going to save money by removing the capping from hotels' bills, many persons will lose the job and will be addded to the 30000 households in 'special need' and the money saved from the hotels is spent into subsidies for the needy. The government income vs subsidies balance will remain the same with the difference that many people will have lost the job. This scenario may not be real if the increase effects only hotels, but it will definitely materialise if the suggested increase is applied as proposed.
Many businesses already struggle to make a profit due to huge expenses and harsh competition. Consumers will have even lesser purchase power. Most probaly (and rightly) there shall be an increase in wages. The global economy is experiencing a slowdown of which we cannot be exempted. Considering all this, the staement in the first paragraph for me looks too realistic.
Loïc Le Brun
Oct 3rd 2008, 21:20
@ Mr. Martin Saliba
Ok, if pv panels are not the solution then what do you suggest. In a very near future, the resources of fossil energy will be extinct, finished, kaput. We really have to act now.
Loïc Le Brun
Oct 3rd 2008, 21:13
Obviously, energy and water bills have increased. It is only fair that one pays for what one uses. Only households in financial difficulty should be supported. Either a business is sustainable, either it is not and consequently has to stop its activities...
joe ablea
Oct 3rd 2008, 19:28
we pay taxes so that MHRA members get subsidised bills. Is this fair
apgrech
Oct 3rd 2008, 19:15
Obviously, all these inceases come before the budget, same like happened when they introduced the surcharge, so the budget won't look too dirty.
So many things are happening so close to the election campaign which was filled with promises and which we now know it wss filed with lies.
Then they'll say the budget was not that bad. We're getting used to the PN dirty tricks.
martin saliba
Oct 3rd 2008, 19:04
@ Emma Xerri.
Get real !. Do you have any idea what size PV panels you would need to operate an airconditioner? And what about the cost? Approx. 5 US dollars per watt. That would be at least 5000 US Dollars. You would still need to puchase an inverter , dry cell batteries and much much more. Fairy tales are for kindergarten not for us grown up. One more thing , are you by any chance related to the same Xerri who sugestted something similar yesterday?
A Camilleri
Oct 3rd 2008, 18:11
Hotels and restaurants have never had it so good, especially the larger ones. For the past years with the surcharge capping they have only borne the brunt of increasing electricity to a very limited extent. Of course someone else was paying ... you and me. If you want to gauge the extent of the exageration in MHRA's claims have a look at the claim that costs will increase THREEFOLD! It's convenient to claim that it will result in a significant loss of jobs. What did the rest of the world do, MHRA? Shift the hotel and restaurant energy costs on other users?
Tony Borg
Oct 3rd 2008, 17:47
@ Anton Debono
Granted but if they were earning millions as claimed by I Borg, I dont think that they would have closed it down.
Fabien Sant Fournier
Oct 3rd 2008, 17:45
While it is true that hotels' cost of sales will increase significantly I do not see why the taxpayer should continue to subsidise the tourism industry through price capping.
anton debono
Oct 3rd 2008, 17:37
tony borg please note that Jerma was closed for land speculation
john saliba
Oct 3rd 2008, 17:30
we normal beings had to face these tariffs for many years . MHRA please note
Tony Borg
Oct 3rd 2008, 17:28
@ I Borg
Do you know how many hotels closed down after Sep11? Mistra, Jerma, Carolina, Island International, Cape Inch, Atlantis, Andar, Mgarr etc etc
l borg
Oct 3rd 2008, 17:12
allways the same old story
WE ARE NOT DOING WELL
even after SEPT 11 the MHRA had concern yet 5 star hotels kept on going up
the only decline is in the workforce because catering workers are the worst treated and working in the touriist industry has become a BIT PART JOB
FAMLIES HAVE TO PAY HIGHER BILLS FOR ENERGY SO HOTELS THAT EARN MILLIONS SHOULD NOT HAVE A PROPLEM
Emma Xerri
Oct 3rd 2008, 16:55
What a shame!
With all that sun and wind, Malta could become energy sufficient and cut its dependency on imported, carbon emitting and poluting fossil fuels. Take the Power Station for example. With some investment, it could run on solar power and eliminate the need to burn oil.
Also, with global warming, air-conditioning in homes is no longer a luxury for the rich but a real necessity. Every house in Malta could be provided with air-conditioning in summer and heat in winter if enough incentive was given to homeowners to install solar panels and get off the electrical grid. Think of the savings in the long run, plus the comfort of having a climate-controlled home, with the added bonus of zero pollution.
Think about it. Some say it is only a dream, but many human achievements started out just as a dream before became reality.
The technology is out there. What is lacking is the political will to implement it.
Go for it Malta!