Wednesday, 19th November 2008
'Consumers should not carry burden of inefficiencies'
Social partners say Enemalta's avoidable losses are unacceptable
The social partners firmly believe that Enemalta should get its act together and eliminate its avoidable inefficiencies, which run into millions of euros.
They believe the corporation should certainly not expect consumers to carry the burden of its losses, especially when the cost of electricity has shot up with the new rates.
The social partners were reacting to an item that appeared on The Sunday Times revealing that the corporation had avoidable losses of €16 million although analysts believe these are closer to €27 million.
The corporation had its accounts last audited in 2005, which prompted the general secretary of the Union Ħaddiema Magħqudin, Gejtu Vella to call for an investigation by the Auditor General.
"This is public money being squandered. We insist that all public funds should be used properly," he said.
His counterpart at the General Workers' Union, Tony Zarb echoed a similar sentiment and said losses should never be thrown onto consumers' shoulders.
The Malta Hotels and Restaurants Association's president, Kevin De Cesare, described such hefty avoidable inefficiencies as unacceptable: "It is completely unfair for people to be paying more when there are all these avoidable losses".
Joe Farrugia, from the Malta Employers' Association, said that although getting rid of avoidable losses would only have a marginal effect on tariffs, consumers should not be made to pay for inefficiencies as a matter of principle.
The corporation's losses include theft, billing inaccuracies and inefficiencies at the Marsa power station. Enemalta has already announced plans to change all meters through a €47 million investment in its fight against electricity theft through a more efficient billing system, while talks are underway with the GWU to tackle overstaffing, unneeded shifts and overtime.
"All efforts should be made to cut down on inefficiencies, irrespective of where these are coming from. They need to be removed as a matter of principle, especially at a time when oil prices are volatile," Mr Farrugia said.
The president of the Federation of Industry, Martin Galea pointed out that Enemalta has a monopoly, which made it even more important to clamp down on avoidable losses.
"I would like to see all the figures and have a proper debate," he said, adding that there should "definitely" be a focus on enforcement.
The director general of the Chamber for Small and Medium Enterprises - GRTU, Vince Farrugia said there was now an even stronger case for a revision of the tariffs.
It is unclear whether the hefty losses are paid for by Enemalta consumers or through taxes. Data released by the government when the water and electricity rates were being looked into showed the government was absorbing about €3 million of the corporation's inefficiencies.
Questions sent to the Infrastructure Ministry for clarification on the matter remained unanswered.
RSS
Comments
Can you please explain to J Martinelli that the price of crude oil doesn’t affect the price of petrol, diesel and thus indirectly the cost of W&E? You are so good at it so please explain it to him too!!
Please discuss the matter with your friend Joe Vella since he claims that the price of crude oil doesn’t affect the cost of W&E, diesel and petrol. He stated this (with your consensus) in other comment boards.
Dr Sant wanted to raise the tariffs to remedy the illegal situation at EneMalta which had been running a deficit since the PN was in power, that is since 1987.
However, Dr Sant found out what those at Enemalta wanted, to make the people pay for their inefficiencies and he stopped the tariffs from being implemented.
I challenge you to show me one single bill with the high tariffs that you mention.
Joe Vella
All the PN Governments did in the sixties were distillers where the cost of producing drinking water was the same as for producing whisky.
How about the nearly new turbines which were bought from Italy and were refurbished by the Dockyard workers? Just a couple of things to remind you.
"For your information petrol and diesel prices in the UK had been much higher than those in Malta"
So are their wages Joe, so are their wages.
C.Camilleri
Do the workers buy oil and manage EneMalta or was/is it managed by the MANAGEMENT appointed by EFApn and Gonzipn Governments? Why do you always blame the workers?
Do you really think that nobody at either WSC or Enemalta or the government knew of the need to improve infrastructure and raise the necessary capital to fund this investment and cut down on waste and avoidable costs? This isn’t an issue that just popped up now. It has only popped up publicly now but it has been kicked around for the last 12-13 years.
Both utilities had plenty of time to raise their charges throughout 12 years and start gearing up and reorganizing themselves. Had they increased charges slowly, the local population and business communities would have had time to adjust themselves accordingly. It is also true that now we are being faced with a big increase in tariffs to make up for the lost time right when a lot of people are already squeezed hard.
Oh and by the way, the recent increase in excise tax on fuels stinks.
Maybe someone should tell Austin Gatt.
Can you answear the following question for me.
Do you thing that Malta have a tab connected to a OIl well that it can turn on and off every time the price of oil goes up and down?
Prices in the UK have gone down recently because the excise taxes had been reduced; and had nothing to do with the international oil prices falling. For your information petro and diesel prices in the UK had been much higher than those in Malta
I cannot believe you had the decency to ask karl Abela where he had been in the last few decades. All I can say is that you and the MLP vision is as far as the point of your nose.
Can you tell me what investments had been made to ensure the uninterrupted supply of electricity and water prior to 1987?
Don't bother to answer. We all know the answer. ZERO, NOTHING, NADA.
@ F J Brincat
You write; "Any company that does not benefit from a monopoly will, almost immediately, turn on itself to reduce its costs and wastages in order to survive."'
How true, it is also true that you and u would have been paying higher prices for electricity and water long time ago. You think that with ever the savings from the so called reduced costs would be enough for Enemalta to fund past, current and future investments to secure the electricity and water supply for years to come. Ye, keep on dreaming in tecno colour.
Of course Enemalta was making a profit before 1987. Oil prices were then some $6.00 a barrel.
In 1997 oil was still $12.00 a barrel and since in 1997 the rates were a little higher than in the 80s. it is assumed that Enemalta was still making a profit.
So why did the government of Alfred Sant raise the tariffs sky high?
You confirm that your Gonzipn and EFA Government were INCOMPETENT because they have been there since 1987 except for a short 22-month span and they NEVER addressed these inefficiencies.
Gonzipn now wants to address them in one go in a very short time because those eu petty dictators are breathing down his neck, but as anyone knows or ought to know, if you give the medicine to the patient all at once you will kill him.
Because now we are going to be made to pay heavily for these inefficiencies and the government is simply shrugging it off with the excuse “that we pay for what we consume”.
Any company that does not benefit from a monopoly will, almost immediately, turn on itself to reduce its costs and wastages in order to survive. They will not risk increasing their costs because then they might lose business to more lean and efficient businesses. Selling costs are usually only increased as a last resort.
One really needs to ask what our main utility providers have done in the last decades to reduce avoidable losses in technical terms?
A lot of people who are now saying that such a horrific increase in tariffs is “fair and justified ” will be talking from the other side of their mouth when they see price increases across the full spectrum of products and services.
The inefficiencies at Enemalta didnt start yesterday. They have been there since decades.
Why are they speaking up now and not earlier? Have they been asleep all along? Or is it a case of taking the opportunity to gather popularity?