Complaining to the EU

While understanding that SMEs are furious at the new water and electricity tariffs and the way they have been introduced, I think it was a mistake for the GRTU to bring these matters to the attention of the EU Commission (November 1). First of all, it is not clear what the GRTU's complaint is all about.

Is it complaining on the lack of consultation? In which case I do not think the EU Commission will really get involved.

Is it complaining about the fact that Enemalta is a monopoly and can increase tariffs at the stroke of a pen, leaving the consumers no other option but to pay up? Fortunately for the government (but unfortunately for consumers), only last week Enemalta secured a derogation from the EU which safeguards its monopoly (October 30). So there is no basis for a complaint here.

Is the GRTU complaining about the removal of subsidies? If this is the main argument, I think this is a lost cause because the EU Commission is all out against subsidies. Or is the GRTU arguing that Maltese consumers and SMEs are being charged exorbitant rates for water and electricity services? I don't think that the utility tariffs are among the highest in the EU - even after the recent revisions, although I'd like to see some comparative studies on the matter. Moreover, one cannot overlook the bleak fact that this country's physical limitations impose higher-than-average costs of production of water and electricity. Admittedly, the situation has been worsened by a stream of wrong decisions and investments (or lack of investments in some cases, such as in renewables) taken by short-sighted governments over subsequent years, but that is another matter.

It is possible that the GRTU's action will trigger an investigation by the EU Commission on Malta's utility tariffs - which will then reveal the fact that Maltese consumers (including SMEs) continue to benefit from highly subsidised water tariffs (even after the recent revisions), from a free sewerage disposal (and treatment) service and from ridiculously low waste disposal charges. Indeed, the GRTU's complaint may backfire as the EU Commission abhors such practices and insists on full cost recovery. Ironically, the GRTU's action may trigger a further upward revision in the utility tariffs in the near future.

Now if the GRTU is complaining about the fact that the larger consumers will continue to enjoy subsidised utility rates to the detriment of the smaller ones, then I support their claims. If anything, the situation should be reversed - since larger consumers can benefit from economies of scale which the smaller consumers can never hope to achieve. This is especially true for investments in energy-efficiency and water-recycling equipment. Moreover, we have been led to understand that SMEs in Malta (and also in the EU) provide the bulk of the jobs, and not the large companies. So the government's use of the employment argument to maintain subsidies for large consumers to the detriment of SMEs and households is illogical and completely anti-social.

Finally, in their complaint to the EU Commission, I hope the GRTU highlighted the fact that this country has a puppet energy regulator, the Malta Resources Authority, which has been and still is powerless in the face of a big monopoly as is Enemalta and its equally imperious minister. Now I think that is something the EU Commission would be interested in investigating and which I'd be interested to follow. One of the reasons why we are in the disastrous situation we are today is due to the lack of a strong energy and water regulator backed up by an equally strong minister.