Conflict now is inevitable - GRTU

Water and electricity bills will be going up by an average of between €72 and €155 per person a year under finalised tariffs that will see some of industry's highest users bag savings.

The new regime, which will be retroactive from October 1, was criticised by social partners worried about the financial burden that both workers and businesses will have to carry.

Infrastructure Minister Austin Gatt, however, made it clear yesterday that the decision was final.

The finalised electricity tariffs do not vary much from what was announced by the government last week and which attracted heavy criticism from both trade unions and employers.

In effect, the only change was a decision to limit the increase on electricity bills for companies that previously benefited from the €50,000 capping on their surcharge. Dr Gatt said the measure, which will cost about €5.2 million, would affect 26 companies, whose bills will not rise by more than 40 per cent, adding that the decision was taken to protect jobs.

Electricity bills for households will remain as announced last week (increasing by a yearly average of between €28.60 and €93.60 per person) while the water tariffs, announced yesterday, will see most households' annual bills grow by between €43 and €62 per person.

But while many businesses will also have to pay more, some will see their water bills go down. A table released by the government yesterday indicated that some commercial entities will be saving more than €84,000 on their water bill.

Dr Gatt said the tariffs were flexible and could fluctuate with oil prices, adding that the new regime was part of the decisions the country needed to make to reach its target of a balanced budget by 2010.

Referring to the request by the Malta Council for Economic and Social Development to postpone the new regime until April, Finance Minister Tonio Fenech said this was not realistic, especially at a time when there was too much uncertainty because of existing challenges.

"We cannot go into an important year without this decision having been made," he said.

Dr Gatt said the large majority of households - about 60 per cent of more than 196,000 - will be eligible for an eco reduction.

The social partners, however, slammed the government's decision to forge ahead despite their reservations. The Chamber for Small and Medium Enterprises - GRTU, whose members will have to share the burden of staggering the removal of the capping for industry over three years, was vociferous in its comments.

Its director general, Vince Farrugia, said the rates were "unreasonable", given the prevailing market and economic situation both in Malta and elsewhere.

"The way the government is treating the MCESD is unacceptable. It's as if we never joined the EU and the government still believes it can just disregard the social partners," he said, adding that conflict was inevitable. The last comment was a thinly-veiled reference to a call the GRTU made to its members to only pay for the electricity they consume and not for anyone else's subsidy.

The criticism was echoed by both major trade unions, the General Workers' Union and the Union Ħaddiema Magħqudin.

The GWU's national council condemned the government's attitude to disregard people's hardships and the problems industry was facing.

Similarly, UĦM secretary general Gejtu Vella said the government was undermining dialogue, especially because it did not give them time to comment on the water tariffs announced yesterday before making them public.

"This reaffirms what Dr Gatt said that there was no more time for discussion," he said, referring to the statement made by GWU secretary general Tony Zarb on Thursday that when the social partners asked to meet again to give their feedback, Dr Gatt said there was nothing to comment about and that the government would implement what was presented.

A number of other constituted bodies also confirmed this although Dr Gatt has refuted it.

Joe Farrugia, director general of the Malta Employers' Association, said the way consultations were carried out was not normal and the social partners had made it clear they were not happy with it.

The president of the Malta Federation of Industry, Martin Galea, said the tariff increases came at a very difficult time for industry. The fact that they were backdated meant more trouble, especially in view of some companies already registering a downturn.