The government has just announced the new tariffs for water and electricity, which have been substantially increased due to "the rising cost of fuel".

However, the effect of this cost is very different in the pricing of water and electricity because, while it is true that the price of electricity depends directly on the cost of fuel, on the other hand, the cost of fuel has a much lower impact on the cost of water. Indeed, from the annual report of the Water Services Corporation one would note that for the period October 2006 - September 2007 the total cost of water amounted to €42,082,000, which includes electricity consumption of €6,666,000. Thus, the cost of electricity in the total cost of water amounts to less than 16 per cent.

In my opinion it is, thus, not justified to increase in the same manner the tariffs for water and electricity when the impact of the cost of fuel is much lower in the case of water.

One must also bear in mind the way the invoice for water consumption is structured. This invoice is based on the actual cost of water, but then, what is considered as normal consumption is subsidised. Thus, in each invoice one finds a subsidy, which is deducted from the total bill. This subsidy varies depending on the number of persons in each household.

Such a system is considered fair by everyone because water is an essential resource which one cannot do without. If one consumes water in moderation then one expects a reasonable bill. This system encourages the careful use of water and serves as an incentive for the introduction of water-saving systems, including the use of wells.

In my opinion this system of billing for water consumption should be retained for domestic consumers, with the only difference being the charge in the rate of water to reflect its actual cost.

Maybe the time has also come to issue separate bills for water and electricity. WSC would invoice for water consumption and Enemalta for the electricity. In this way one would use different pricing mechanisms for the utilities.

The government has also stated that an increase in the cost of water could lead to further exploitation of the aquifer by means of boreholes by the heavy users. To try to control this water extraction, a call for borehole registration has been issued. It has also been stated that the water extracted from each borehole is to be metered. Infrastructure Minister Austin Gatt stated that borehole water should be charged.

Most boreholes are used by farmers for the irrigation of their crops. If a price is imposed on water extracted from boreholes then the cost of agricultural production would become prohibitive.

Hence, if the government is serious in its resolve to limit the extraction of water from boreholes then one needs to provide farmers with an alternative source of relatively cheap water. This can be done both by the collection, storage and re-use of rain water and by the use of treated effluent.

The government should invest in alternative sources of water by building the necessary infrastructure to manage the storm water. As used to happen in past years, the government should also give financial support to farmers for the construction of reservoirs.

In the case of the re-use of treated effluent, Dr Gatt states that it is not possible to use this water for irrigation purposes because it would need further treatment. This argument is wrong. Indeed, since its inauguration more than 20 years ago, the water produced by the Sant'Antnin sewage treatment plant has always been used by the farmers of that area for irrigation purposes. Likewise, the second-class water produced by the new sewage treatment plant in Gozo is also being used by farmers.

But even if one assumes that to use the second-class water one needs to treat it to a further stage, such a process would still be economically viable. This is because a percentage of the water used for irrigation purposes actually filters down to recharge the aquifer. One must also remember that unless farmers work their fields, these fields become derelict, thus having a very serious negative impact on the rural environment. So one can argue that the provision of water to farmers helps in the upkeep of the rural environment.

The problem of the distribution of second-class water to farmers lies in the location of the sewage treatment plant, in particular with the location of the largest plant in Kalkara.

Now that our largest treatment plant is to be built at Kalkara it is extremely expensive to distribute the water produced from this plant to other areas because it would require a new distribution network. In my opinion the choice of locations for the sewage treatment plants was wrong because the use of the second-class water was not factored in when deciding on the location.

Thus, in my opinion it is incorrect to use the same yardstick when setting the price of water and of electricity. I strongly recommend to the government to retain the present format of water billing for domestic users and to invest heavily and provide financial aid to those who would like to exploit alternative sources of water.

Mr Buhagiar is the Labour Party's main spokesman for infrastructure and capital projects.