Power tariffs are 'shock treatment of the highest degree' - MHRA
The utility tariffs proposed by the government have been described by the President of the Malta Hotels and Restaurants Association as being "shock treatment of the highest degree."
Kevin DeCesare told an extraordinary general meeting of the association today that the government should withdraw its proposals and engage in real consultation with the social partners.
"The MHRA is upset about what was done but equally by the way it was done. The way this matter was handled shows a great deal of disrespect for industry," Mr DeCesare said.
These tariffs, he said, came out of the blue, not having been included in the pre-budget document.
"In fact, government always led us to understand that the capping system will remain in place due to the importance of maintaining our competitiveness and employment levels," Mr DeCesare said.
"It is ironic that while Internationally all governments are using mechanisms to cushion economic shocks, our government, in its wisdom, decides to do the exact opposite and send industry into a frenzy presenting such serious changes in an unprofessional way."
He said the MHRA would be insisting with government that before any decision was taken on the matter,a proper socio-economic impact study should be conducted.
"We simply cannot accept a quick fix that has not been thought through properly as this could lead to serious loss of employment and problems within the industry," Mr DeCesare said.
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joe borg
Oct 9th 2008, 12:35
And we all continue to live in our candy coated world and sing la la la. While the govt gets on with the business of fleecing us all unchecked. The world will not change and common sense will not prevail. It's too late to complain now Mr. Decesare.
Stefan Kottmann
Oct 8th 2008, 18:26
Government should not subsidize operational costs.
The beauty of capitalism is that if the expected return from capital invested is less than what is acceptable considering the risk and size of capital outlay (amongst others), the entrepreneur can restructure, cut costs, and implement a new business model. What Mr. Decesare is saying is that the MHRA’s members have done their homework by looking at the proposed utility rates and, after considering all possible countermeasures, are forecasting that they will not be able to generate the acceptable returns mentioned above. So short of continued subsidies, some businesses will go under and others will slash jobs.
Mr. Decesare is shooting himself in the foot because he is highlighting the dangers of operational subsidies to the economy in long term, and not highlighting their importance.
Subsidies hide the fact that an industry is not viable or efficient and the choice is only between keeping jobs or slashing them. Whereas by eliminating subsidies, increased efficiency or innovation will make up for the increased rates, or capital will flow to new profitable ventures that don’t require subsidies, which results in a new stream of better paying jobs than those Mr. Decesare is threatening to slash.
P Fenech
Oct 7th 2008, 22:46
I tend to agree with M Vella. Just consider the fact that tourism industry's effect on our economy is proportionally much higher then other countries. (Even the ones who compete directly with us) This constitutes to approx 25% of our GDP. The industry employs 40000 people on Full and part time basis. The more hotels close down the less attractive our country will be to airlines since it would not be viable to continue operating to our island. Not to mention Tour operators who are already considering pulling out due to low capacity, (Just imagine when they will be told that rates have to go up much more then our competitors will do) Now I leave the rest for your imagination.
Winston J. Zahra
Oct 7th 2008, 21:48
The sweeping statements below about hotels not investing in environmentally sound technology is not correct.
Our group has invested € 5 million to ensure that we operate in the most environmentally sustainable way possible. Our hotels produce all the water we need through reverse osmosis plants, two of our hotels recycle waste water through waste water treatment plants (with one property providing free water to government for use in national afforestation projects), one of our hotels is fitted with an extensive solar panel system, all our hotels use energy saving bulbs, two of our hotels are fitted with double glazing glass, one is fitted with tinted glass etc.
I could go on but I am limited to 200 words. I think it is suffice to say that our environmental credentials have been recognised twice by the international magasine Green Hotelier, we have received awards of merit from two international hotel organisations, been recognised at the higheeat level within the Radisson Hotel chain, been awarded a gold medal by the United Nations and been awarded the environment award for industry locally.
We do this because we believe in operating our business in a responsible manner.
Winston J. Zahra
Island Hotels Group
Nigel Lawrence
Oct 7th 2008, 19:57
@ neal debono
I fully understand the implications that EVERYBODY is facing higher costs and expenses. Why should the rest of us have to absorb OUR increases AND that of the hotels. Get my drift?
M Vella
Oct 7th 2008, 18:54
Hotels pay taxes, hotel employees pay taxes.. Higher costs mean higher rates and therefore the Maltese hotel sector becomes less compatitive. With higher rates and less people this will ultimately lead to a substantial ripple effect; farmers, fisheries, bakeries, dry cleaning companies, breweries, hard ware stores, linen / crockery providers, transport providers, etc will all have substantial less business, meaning a record loss in jobs.
Students hoping to earn some money with a part time job will not be employed anymore and subsequently rely more on their parents, full timers working an additional part time will not be able to cover their mortgages nor pay for that car that they need for their growing families; are you going to explain to the children of redundant employees why mummy and daddy only can get them 1 toy instead of 2 for Christmas ?? ...
Do you need me to continue and perhaps draw you a picture with more colors and shades to understand the situation?? ...
neal debono
Oct 7th 2008, 18:18
Nigel Lawrence I do not think you understand implications and added expenses hoteliers face already, unless you understand the topic.
carmel cremona
Oct 7th 2008, 17:52
Though appreciating that the tourist industry could be facing difficult times mainly because of the current world financial situation, it is pathetic to hear the hotel owners moan after years of receiving aid from the government. Pity if jobs are lost but they are only concerned of losing their profits.
R Borg
Oct 7th 2008, 17:40
I am really surprised that all the organisations are all up against the increased energy tariffs. I am even further surprised that some of them have recommended alternative energy measures to reduce the cost of energy.
The EU is planning all these energy cost increases through measures it is taking against climate change.
Euro MPs stick to climate targets -
http://news.bbc.co.uk/2/hi/europe/7656478.stm
Electricity cost must go up! This is the plan by the EU to set an example to the world that it is doing something to tackle climate change and in the mean time try to come up with an alternative energy solution.
Please note that up till now renewable energy is not financially viable.
Mario Borg
Oct 7th 2008, 17:25
I must say that I really lived well in the nineties and really believed that our economy was improving.
Now I realize that I was all a dream.
effie carbonaro
Oct 7th 2008, 17:15
In a brief meeting trelleborg employes at the hal far plant were informed that the company electricity bill will rise by four times. An example was given that for ever 3000 euros paid the company will now pay 12000 euros.this plant is already hit by a low order book. Is these the way Dr Gatt is helping industry?
deb bugeja
Oct 7th 2008, 17:10
Considering that tourism is one of the major employers, the government has to be very careful about these new proposed tariffs. I just can't imagine more jobs being lost when many factories are closing down.
I just wonder how could Hon Tonio Fenech say that the economy in Malta is strirring up when a lot of employees are threatened to lose their jobs.
M Portelli
Oct 7th 2008, 17:04
We all know that every government always supported private investors in the local tourism industry, for example; land was given for cheap rental or lease at price for the promotion of investment and creation of new jobs.
We all know these top "hoteliers" get rich and richer, which in all fairness i don't have a problem, but when I see such attitude that the return on investment is then fully placed in their pockets its not acceptable. Because such subsidies are there to help the industry and not there forever!
The building of such capital is there to sustain any fluctuation in the market as it is happening now. Yesterday I took the liberty to watch Bondi + and I partly agree with Dr Gatt on the lack of investment of energy saving from such industry. Such investment should have been a top priority for these 5 star hotels.
When we hear about a new Hotel being built and promoted into millions of investment while forgetting the essential running and operating costs. Then what happens? then we start speculating that hotels are closing down and job losses.
Joe Bonello
Oct 7th 2008, 16:58
Is Mr. DeCesare expecting that I, as a tax payer should subsidise the tourists who patronize his hotel ? No way ! I am willing to pay for my consumption - whatever it costs ! So should everybody else - be it a hotelier or a visiting tourist !
A Mangion
Oct 7th 2008, 16:41
I don't think its a fair comment from MHRA. Try to park in one of their hotels, or take a drink or a service, or book a weekend break and you all know what prices they charge. Eur 7 to park your car for 3 hours is not free at all!! Why are Maltese charged different (higher) fees when booking for a weekend break than what tourists are charged? (And i have a personal real experience with this).
And then they are asking me to continue subsidising their energy bill, subsidising Ryanair to get tourist here, subsidizing MTA to promote Malta.....and they dont invest in green energy to minimise our subsidises on their energy bill. Where are the solar panels on their roofs, their recycling water projects, their energy conservation ideas (double glazing, room layouts, window and door sizes etc...).
I am totally on Mr Gatt's side on this. I should not make good for the rich. Yesterday I heard an astonishing figure: In the first 8 months of this year the Hotels generated revenue of EUR 88 million, nearly twice as much as two years ago. And still no investment from these operators in green energy.
S Micallef
Oct 7th 2008, 16:21
I pay taxes to subsidise MTA campaigns to fill up the hotels of the few.
I pay taxes to subsidise Ryanair to fill up the hotels of the few.
I pay taxes to subsidise Enemalta not to charge the few hotel owners as I am charged.
I spend a night in Paceville and pay Eur 7 to use a hotel parking.
I purchase an orange juice and a sandwich from a Paceville hotel lobby bar for Eur 13.
And none of the hotels here in Malta has a single solar panel or energy saving bulb.
I bet this is real food for thought!
F J Brincat
Oct 7th 2008, 15:48
It’s so obvious that Mr Lawrence is not in employment in the hotel sector and thus is spared the anxiety of not knowing whether or not he risks losing his job or his business as these establishments either start sacking people to keep costs down, or else just fold up completely.
Oh yes, they could hike up the prices, but then, they wouldn’t be competitive enough would they? Don’t forget that a prospective tourist doesn’t just check the air fare, but also the prices of the hotels.
And when the hotels close down, there will be a reduction in beds and if a tourist can’t have a bed to stay in (because the hotels left will be full) and is not prepared to wait for one, then he will look at other resorts abroad.
A Daley
Oct 7th 2008, 15:25
All these complaints show that Labour was right and correct to rid us of the subsidies as early as 1996 ,when Oil prices were so low.
Yes, it would have been a little difficult for the first two years, until salaries caught up, but it would have been done at the right time.
Now, with the excuse that EU regulations would not allow any more subsidies, PN are kicking everyone in the teeth, especially our fragile Industry, when everyone needs every help that one can get to mount the present financial crises.
The real reason why PN are doing this now is, that the BLACK HOLE of the National Debt is going to get even deeper and because of irresponsible spending sprees that we had during these last 15 years, thanks to the ever increasing Debt, the Government has to and must cut it's spending at a time when it should be increasing spending to buffer the wave of financial turmoil WHICH WAS PREDICTED AS FAR BACK AS FEBRUARY 2007!
This administration has to go and go quickly, as they are rendering our country to beg and borrow from abroad, same as they did in the 60s!
OUT NOW!
Nigel Lawrence
Oct 7th 2008, 15:10
It's so obvious that these people STILL want the taxpayer to pay for their utility bills. Frankly. we the taxpayer, have had enough of your scrounging, so do like the rest of us and PAY UP.