Eco-reduction mechanism 'unrealistic'

The government's pledge to introduce an eco-reduction mechanism as an incentive to cushion the hefty electricity tariff proposals has been described as "unrealistic" by an expert.

Veteran environmentalist Edward Mallia told The Sunday Times few people would be eligible for the eco-reduction scheme, which caters for those who do not exceed 1,300 units of electricity consumption a year.

The government proposed new tariffs last Wednesday, which would in effect mean that the majority of households would have to fork out an extra €76 to €270 a year. These would replace the surcharge, currently set at 95 per cent.

Social partners have been heavily critical of the proposals, which they warned would lead to hotels and businesses being crushed as well as causing a shock to the economy.

While Prof. Mallia described any incentive to cut down on power usage as laudable, he said that the 1,300 threshold was practically unachievable.

Prof. Mallia, a physics professor known to lead a frugal, eco-friendly lifestyle, provided his own household electricity usage as a model to prove the point.

His home for two individuals utilises some 10.5 units a day - which works out at some 2,000 units a year per person. But that is very conservative usage - around 10 per cent of Prof. Mallia's home is powered by photovoltaic solar panels he has no air conditioners and he cuts out any wastage.

Domestically, on average, each household consumes some 5,000 units a year, and the figure shoots up well beyond that in most households with air-conditioning units.

Prof. Mallia said he would like to analyse the Danish model on which the government is said to have based its eco-reduction mechanism.

In a press conference yesterday, General Workers' Union general secretary Tony Zarb also said that preliminary workings by the union's own experts showed that the benchmark for eco discounts was "totally unrealistic".

Mr Zarb echoed the reaction of fellow social partners in recent days, saying that the new regime would jeopardise jobs and further increase inflation.

He insisted that the proposals, if implemented, could jeopardise the economy, particularly in the context of the effects of the international financial crisis.

"Isn't it obvious that in the circumstances workers would ask for wage increases? And wouldn't that jeopardise competitiveness? But it seems that when it's the government making the proposals, competitiveness is not an issue anymore," he said.

Mr Zarb also criticised the level of consultation surrounding the proposed hikes and asked why there was no mention of the plans in the pre-Budget document.

He drew parallels with the month preceding Budget time in 2005, when the government introduced the surcharge on utility bills. Even then, he said, nothing was mentioned in the pre-Budget document and a few weeks before the Budget the Malta Council for Economic and Social Development was presented with plans to introduce the surcharge.

Wednesday's presentation was similarly an exercise in imposition, not consultation, Mr Zarb said, pointing out that Investments Minister Austin Gatt had told the MCESD members that they had five options to choose from and that if they did not choose - then he would.

"That's not choice... actually in the circumstances it's like being asked what you would rather be killed with; being thrown off a roof, shot or run over by a car..." he said.

In a statement last night, the government said it had not yet taken a definitive decision on the issue and it was willing to listen to alternative proposals from the constituted bodies.

But in the morning, the union officials insisted that there had been no such call for suggestions during the meeting, pointing out that there has been a difference between Dr Gatt's tone during his presentation to the MCESD and public statements made by the government since then.