Water theft increases as price rises

Avoidable losses of water - including theft - have risen despite a drive by the Water Services Corporation to reduce losses resulting from leaks.

Since 2003, the WSC has managed to reduce water leakage by 10 per cent, according to figures provided by the corporation. In the same period, however, the corporation's avoidable losses increased by seven per cent.

Experts believe the rate of water theft has risen since the introduction of a surcharge on water and electricity bills.

The corporation's avoidable losses now amount to 23 per cent of total production. There are additional losses due to leaks, meaning the amount of unbilled water is as high as 41 per cent, according to the figures seen by The Sunday Times.

When contacted, former WSC chairman Michael Falzon said that individuals resorted to water theft if it was worth the risk. "Water theft becomes even more attractive as its price goes up. Water theft by people who use it for irrigation purposes is quite common, as is water theft by commercial entities that use relatively large amounts of water. It is obvious that water theft is resorted to if it is 'worth' the trouble."

The total cost for the production of water is €50.8 million, €10.7 million of which is being paid to Enemalta for electricity.

If the WSC is charged Enemalta's new rates a situation could arise whereby consumers would effectively be paying 'twice' for the same electricity.

This is because a report commissioned by the government to calculate Enemalta's new electricity rates has already taken into account the power used by the WSC to produce water - and this is being passed on to consumers in the new electricity bills.

Therefore, if the WSC is required to pay Enemalta the new rates and passes on this cost in its own bills, consumers would end up paying for the WSC's expenditure on power both in their electricity bills and their water bills.

The WSC has so far declined to comment on whether it will be charged Enemalta's new rates. A spokesman said: "We are not in a position to answer until the legal notice covering the new water and electricity tariffs are published in the near future."

The report states that a 10 per cent increase in electricity cost raises total costs to be recovered from tariffs by 2.4 per cent.

Consumers, however, have not benefitted from past savings made by the WSC as a result of its efforts to reduce energy consumption at Reverse Osmosis (RO) plants. The savings could not be reflected in decreased water prices because of the imposition of the surcharge that went directly to Enemalta coffers.

Although WSC savings on energy were not passed on to consumers, they were partly the reason why government subsidies to the corporation were drastically reduced over recent years, according to sources.

Last year, the amount of water produced from desalination plants was 55 per cent of total production, costing €23.5 million. This is in stark contrast to the production cost for 45 per cent of total water produced from ground water sources of only €4.7 million.

The pressure on groundwater sources, also resulting from the illegal extraction of water from boreholes, has necessitated a greater reliance on RO plants. This has increased the cost of water for consumers.

Hydrologist Marco Cremona insists that the increase in tariffs in mains water has resulted in a surge in the drilling of boreholes and a drastic increase in illegal extraction of groundwater.

In 2006, the estimated figure for illegal extraction was 18.5 million cubic metres a year, more than the total amount of water the government produces through its RO plants.

Inefficiencies at WSC and Enemalta account for a significant portion of the losses being suffered by both companies. The government has decided to increase utility tariffs in a bid to eliminate millions in subsidies.

Analysts have estimated that Enemalta's avoidable losses are €27 million, and that further savings can be made by reducing inefficiencies at the Marsa power station.

In proposals submitted to the Prime Minister yesterday, the unions stated that the government must ensure consumers are not made to shoulder inefficiencies in production and distribution.