Labour's tariffs' workings based on wrong premises - ministry

The workings on which Opposition leader Joseph Muscat based his argument that the surcharge should be reduced by at least half and which he gave unions this morning, were built on the wrong premises and calculations, the infrastructure ministry said.

The ministry said the surcharge was not calculated on the fluctuating oil price of the day but on the rate of July to September which had reached record levels. For when the cost of oil was higher in July Malta did not stop using electricity.

Moreover, the ministry said, the surcharge reflected just oil cost fluctuations. Since 1998, the price of water and electricity was never changed to reflect the corporations’ investment and inflationary movements.

The ministry said that Enemalta’s inefficiencies were excluded from the workings leading to the tariffs, drawn up by consultants KPMG.

It said it was also not true that the new rates would amount to a 194 per cent surcharge. These would amount to a surcharge of between 125 and 130 per cent. Had the government kept to the 99 per cent surcharge as was being proposed by Dr Muscat, it would have had to subsidise Enemalta rather than allocate the funds towards the generation of clean electricity.