• email article
  • print article
  • small text sizemedium text sizelarge text size
  • comment on this article

Water and electricity rates

Costs amounting to €85.6m to be borne by consumers

Hike set for January but margin unknown

Households and commercial consumers will be paying higher water and electricity rates come January 1 but the increase remains a mystery as the government did not publish the revised tariff bands yesterday.

The Infrastructure Ministry said last night Enemalta and the Water Services Corporation had filed a request with the Malta Resources Authority for an increase in tariffs, which would come into force next year. However, the scale of the revision was not announced "on the direction of the MRA".

The public will only get to know by how much their bills will rise when the MRA approves the tariffs.

From past experience it has taken the authority weeks and even months to approve the public utility companies' tariff revisions. Last year, the tariffs introduced on April 1 were published by Enemalta in March and approved by the authority in May.

The ministry said the upward revisions were required to make good for increased operating costs, primarily the rise in the price of oil, which represents 62 per cent of all Enemalta's expenses. Forecasts showed that fuel oil was expected to cost more in 2010 than it did in October 2008 when the new tariffs were introduced for the first time, it added.

The total increase in costs for Enemalta and WSC to be borne by consumers is expected to be €85.6 million. Of these, €74.9 million are attributable to higher oil prices and €10.7 million to investments in the new sewage treatment plants, the smart meter system and the new power station at Delimara.

The higher cost of oil also includes a €21.5 million shortfall the corporation is expected to register at the end of 2009 because tariffs did not cover increasing oil prices.

Last April, the new tariffs were intended to raise €254.2 million in revenue to cover the corporations' costs. Adding €85.6 million to that amount means consumers would have to fork out €339.8 million to cover next year's increased costs. This is almost €35 million higher than the total cost intended to be recovered from consumers when the tariffs were originally introduced in October 2008.

The ministry said the government would continue to subsidise bills for low-income earners through an energy benefit. The sewage sector, it added, would also continue to be "heavily subsidised".

In May, Minister Austin Gatt admitted that the increases in the water and electricity rates should have been introduced in January 2009 rather than October 2008.

With the latest tariff increases it seems he has learnt the lesson of not introducing back-dated tariffs but the decision not to publish the proposed hikes may very well present another one to the learnt.

The electricity tariffs were cut by 22 per cent for households and by up to 26 per cent for commercial and industrial consumers in April.

  • Google Bookmarks Del.icio.us Facebook Blogger YahooMyWeb Digg Reddit Stumbleupon
  • email article
  • print article
  • small text sizemedium text sizelarge text size
  • comment on this article

Comments

Mike Magri(on 8/11/09)
@.. M. Gauci.. First of all be informed that this is my second attempt to reply to your comment on mine, of 20hrs and 15 minutes ago, as the editor of this block decided not to publish my yesterday`s first reply...!!!

Having said that, i must tell you that you have missed a very important and scarosant point in your reply of how serious businessmen conduct their business, IF they still want to remain in business, due to fierce competition, in any kind of business..

To be simple, they must ALWAYS make good in their reserves for a `Rainy Day`.. This way they can always remain competitive and thus will not loose their businesses or any of their customers..

Yes Mr. Gauci... That`s how smart and serious businessmen run their businesses, and NOT by MANAGEMENT BY CRISES system, (like your lame example), and as what EneMalta`s Management seems to have done since 1987, when then it was making profits...!!!!

Consequently, the WHOLE POINT is this..... WHY should we all suffer SO HEAVILLY for such mismanagements of our parastatal companies and with NO ONE assuming political accountability, for ALL these PN Years in government.......!!??!!??

Hope you understood better now....!!!
M.Caruana(on 8/11/09)
@Mark Galea / Galea L

La johrogg Joe Muscat bi stqarijja li jekk jitla hu s-CEO (l-isfel) jaqilaw 10K Euro fis-sena biss nibda nemminkhom li intom qed titkelmu bis-serjeta meta titkelmu fuq dawn il-pagi.

Dawk il-pagi ma huma xejn hdejn ohrajn (Marisa Micallef Leyson - as reported, Joe Muscat mhux 40K Euros ta, just biex tghidlu kif jirbah l-elezjoni) ahseb wara to manage a huge corporation like that kemm suppost taqla. Morru saqqu l-hass ghax ma tafux x'qed tghidu.

Foldiri skond inthom (ideajat ta mohh miftuh) if you add up those wages and sack those people, then the corporation would have enough money to cover millions of Euro cost?
Stop speaking through your back sides, and for once use your brains not your appendix to come up with sensible arguments.

@N.Bonello
Going on a web site and findng the cause of our real problems in one second makes you a candidate to become CEO for this corp. I bet you know nothing about how oil is purchased, from what markets, etc.. and in one sec you exposed the real conspiracy that oil is down.

I don't like paying more for power as much as you do, but ignorance irks me.
lorraine vella micallef(on 8/11/09)
it is true that we get nothing for free. But what is all the talking to start using energy saving bulbs, start using solar systems and solar panels...... These were introduced so that our bill will be less and have more money in hand but it seems that someone is not happy about this. As well starting the bills as from the 1st of january does mean that we have to stop our christmas shopping to see how we are going to survive. I think it is about time to start using candles again. We consumers must have a union so that at least this union will start considerating how to stop the monopoly of electricity. THIS IS CONSUMER RIGHTS.......
victor borg(on 8/11/09)
@paul caruana
yes there is another choice the government must stop wasting our money by letting big
businesses get away with murder avoiding paying vat and taxes and throwing money
away on renzo piano and millions on sensara for the new power station
N. Bonello(on 8/11/09)
To those who BLAME high cost of oil of continued bill increases when oil has in fact gone down.


The following graph shows the world price of Oil over the years - http://futures.tradingcharts.com/chart/CO/M

It is true that there was a dramatic jump in oil prices in 2008 but went down as the recession came in. The dramatic jump also occurred in oil products and power prices worldwide. But when oil went down the world trend was that oil products and power costs ALSO went down. In Malta they continued to rise further ? This same economic phenomena happened with food prices.

Well I cant understand it really. What I do see is a massive exercise by Enemalta to prepare the path for privatisation with massive costs of undersea power cables from Italy and these new IBM meters (which we have to buy/pay for) and its inherent infrastructure. All of this at OUR cost then when everything is in place Enemalta will be sold for a pittance. Then the new owner will then increase prices. This is my vision 2015 - mismanagement all the way.
Mark Galea(on 7/11/09)
@Galea. L
As you know, I rarely agree with you. However, confronted with such details, I tend to agree with you. Exposing their wages is one of the best ways to make pressure on such people.
Gordon Farrugia(on 7/11/09)
@R. Azzopardi yes it is quite easy to hedge. you just have to purchase a futures contract, I know what I'm saying as I trade futures.

@Paul Caruana costs haven't gone up that much, not with the USA dollar falling and oil prices are still very much at a reasonable level (very far away from $150 hit last year). Fact is we can't go on like this and there has to be accountability. To me this is a failure of the government to delivery and the minister in charge should resign.
Paul Caruana(on 7/11/09)
After all has been said and done, we are left with the simple fact that costs have gone up, and it is not the government's fault that international oil prices have gone up, nor that we need to invest in new, cleaner electricity generating equipment, if we are ever going to close down the Marsa powerstation.

All this costs money, which the goverment can recoup in one of two ways...from the taxpayer, or from the consumer - there really is no other choice!
Galea. L(on 7/11/09)
Why we have exorbitant tariffs.
Chief Executive Officer = €81,550 per annum
Annual Communication Package €908
Car Allowance €582 per month
Insurance €2,330
Total €91,772 per year or €7650 per month

Chief Financial Officer = €60,564 per annum
Annual Communications Package €908
Car Allowance €582 per month
Annual Responsibility Allowance €2,330
Insurance €2,795
Total €73,581 per year or €6,132 per month.

Chief Information Officer €45,590 per annum
Annual Communications Package €908
Car Allowance €582 per month
Insurance €2,330 per year
Total €55,812

Chief Commercial Officer €41,930 per annum
Annual Communications Package €908
Car Allowance €582 per month
Insurance €2,330 per year
Total €45,750 per pear or €3812.5 per month

Chief Corporate Services and Chief Projects officer bot have same salary and conditions
Salary €37,270 per annum
Annual Communications Package €908
Car Allowance €582 per month
Insurance €2,330 per year
Total €41,090 per year or €3424.17 per month

Why do they have such fantastic salaries and allowances when EneMalta is in such a dire situation? Does anyone consider that EneMalta has been managed successfully or disastrously? Why should people with such salaries also enjoy the other benefits?

This is the inefficiency we are paying for
R. Azzopardi(on 7/11/09)
@Gordon Farrugia

Do you all think that hedging is so easy? Do you thnk that oil companies will hedge at a time when oil prices fall (as they did at the beginning of the year)? Think again. If they could, oil companies wouldn't sell a drop of oil at low prices. When prices fall, they only sell oil on the spot. No forward buying takes place. People running oil companies aren't stupid you know.
Paul Smith(on 7/11/09)
The only people to blame for this situation is the Maltese Government. They the Gov are fully aware of the worlds precarious oil situation - their may be a glut of oil on the market at the moment but that is purley due to demand destruction. Global oil supplies are falling with some of the most mature biggest fields running on empty. Just check out Mexico, Kuwait and Saudi Arabia. Saudi is no longer the worlds biggest producer - that should be enough to set alarm bells ringing on it's own! We are still finding pockets of oil but those new discoveries are small and are not arresting decline rates, when and if the global economy picks up, so will oil prices. Malta has put all it's eggs in one basket when it comes to energy. Malta uses more oil per capita than almost all EU countries. Each Maltese uses something like 18 barrels a year each.
Malta needs to end it's oil addiction and lower it's energy footprint, otherwise these energy bills will cripple you and your economy.
Gordon Farrugia(on 7/11/09)
for me this ranting of increased energy costs doesn't hold up. If this government was accountable Enemalta would have hedged its energy prices when the price of oil was hovering at the $40 price level. At that point it wouldn't have made any difference if the price of oil were to continue falling; the certainty and stability offered by a hedge would have benefited the local economy.

The only real reason why they are increasing bills is so that we pay for the capital investment projects and enormous debts - the latter being the fruit of some 23 yrs+ of nationalist gross leniency and mis-management in managing the country's financial coffers which now you, your children and your grand-children will be burdened for the rest of your lives.
Joseph Casha(on 7/11/09)
Here comes another 'Estimate' Fiasco. If the rates are going to increase on January 1st, then one would expekt the meter to be read on December 31st.
David A. Agius (Not the M.P.)(on 7/11/09)
Is it illegal to have no electricity nor water meters / sewage system? It will soon be an interesting proposal.
E. Vella(on 7/11/09)
Is sena l-gdida bl-Istrina ha nibdewha mela!!
g. scerri(on 7/11/09)
If the new tariffs are to cover the cost of the smart meters, should the taxpayer then be also billed for them when they are installed? Isn't this billing twice for the same item? Is it legal for democratic it certainly isn't.
M.Gauci(on 7/11/09)
Finance guru Mike Magri, opens shop selling fuels. He imports his material from his supplier abroad. He buys his stock at 10 cents per ltr, and makes a markup (unreal one) of 2. Hopefuly with that 2 cents per ltr he will manage to pay ALL his costs and tax and have a healthy balance for training, re-investment, technology investment etc..

He keeps his profits low purposely not to make any spikes within his customer base and to help some others which he sells his product to, at cost price because they cant afford anything more.

Day 100 of his operation, his supplier send him his next consignment of fuels and bills him 20 cents a ltr.

C.F.O Mike Migri has a choice:

Pass the cost to the consurmer that wants to buy his products at 22 cents or keep on selling his product at 12 cents per ltr.

His cannot just fire people easily , because if he does, he is still required to pay them social benefits. He can choose to increase the cost on other things (tax eleswhere) or he can choose to close shop and not provide a service. What will it be, Sur Mike-ELECTIONS?
James Sultana(on 7/11/09)
Why is the cost of the Smart Meter system being passed over to the PAYING costumers ?

Didn`t Dr. Agositino Pio Gatt tell us that the Smart Meter will finance itself in three years with the increased revenue they will record and the abuse they will prevent ?
And why do those who pay their full bills have to finance something from which "smart" talk apart has its main and only aim to monitor minute by minute the consumption and hence recuce the abuse of those who somehow manage to use un-metred units ? As usual it pays not to pay in Malta, as while we would have paid our bills, the unbilled units and the cost of this system, the abusers will only start paying when the system is in place.
And why introduce the smart meters nation-wide rather than targeting abusers first?

Also, why do we have to pay for the unexplainable expenses of Enemalta-branded cars being driven 24/7 around the country even in off-duty hours to make errands, take children to school, go out in weekends, etc ... at times the same cars driven by other family members and not by the abusing employee?
Joseph E Briffa(on 7/11/09)
I note an element of hysteria in the mind of some bloggers...It seems that some people live on another planet when they question whether the consumers should bear the expense of additional power stations and other energy providers. Who else? If one installs a new facility at home, who pays for it, one's neighbour? So if a new power station is built in Malta, who pays for it? Obviously the consumers, either directly by paying higher energy rates or, by being taxed in some other way to raise revenue to enable the Exchequer to fund Enemalta's expense. It's neater to raise water and electricity rates than for the exchequer to raise taxes. This is elementary accounting. As for Mike Magri's hysterical call for an early election; does he think that if say there were to be a Labour government in power he would be exempt from paying higher rates for his energy consumption? If he is entitled to such an exemption he can join the other 28 000 families. Again here it's other energy users who are 'subsidising' these families.
P.Cassar(on 7/11/09)
And a few days ago Dr. Gonzi was assuring us that NO TAXES WILL BE INTRODUCED IN THE NEXT BUDGIT.
OOOPs sorry, this is NOT a tax if fact we are NOTpaying it from our pockets, OR ARE WE???
WILL GONZIPN EVER STOP TAKING PEOPLE FOR A RIDE (OR SO HE THINKS)!!!
victor borg(on 7/11/09)
so we have to keep paying these very high tariffs because of all the exessive waste
and exorbitent high wages of all the executives of both enemalta and water services
surely dr gonzi and dr gatt must know the damage all this is doing to our economy
all this will snow ball it will kill the manufacturing idustry tourism and most of all
us pensioners unfortuneately we have to wait such a long time for the election
victor vella(on 7/11/09)
I do not wish to see our country in limbo of darkness, as happened in the 70's but pray tell me hasn't anyone in authorithy ever been to Cyprus? There only the intersections of major roads are lit with street lamps, the rest of the roads have large reflectors, which apart from minimising the effect of the bright light coming from cars traveling in the opposite direction they also reflect the car's lights onto the road.Malta leeeeeeeeeeeeeeeeeeee we put 2 lamps every 50 mts of major roads, as if we have oild flowing out of every nok and cranny of the countryside.The goverment should stop the waste itself and not waste and make us pay for it.That is my budget wish.
Edward Camilleri(on 7/11/09)
The rise in utility cost is as expected, we must pay for whatever we consume. We cannot expect to continue consuming and wasting resources that are mostly paid from subsidies.

The problem is that taxes have not gone down as promised. The government must lower taxes if subsidies have been removed.
Maria Zammit(on 7/11/09)
Badworkmanship costs!

Do Enemalta and WSC cost badworkmanship? What are they doing about this?

Do they have a system to check that workers are not going more than once to do the same job, sometimes as many as three times and not doing the job right. How many man hours and transport costs are wasted because of badworkmanship.

Is this one of the reasons why administation costs are not being checked? It's not fair that whilst some are cheating their employer, we citizens have to pay!

If one doesn't have conscientious workers and system of accountability in place, it's a waste of money to have well paid top management, might as well have a clerk manage Enemalta and WSC, amongst others!

Raymond Farrugia(on 7/11/09)
€339,800,000 / 400,000 population = €849.50 per person. It could be worse I'm sure!
John Azzopardi(on 7/11/09)
Maltese want everything for free. In a free market, nothing is for free. You cannot have stipends, free education all the way to the university, free housing, free medical and get free water as well. However, there is a bigger problem for Malta. Malta industry and tourism are not growing and it doesn't matter who is in government, PN or PL, nothing will solve this problem unless Europe gets better and the world economies get better. Our IT City is dead for now, let's hope it will not be one of those monstrouous monuments as those Olympic cities after the Olympics are over. To create jobs you have to be competive and to have foreign investments, the company has to be able to make a decent profit. All people have to do is cut their periodic travel to Europe and keep going all over the world. Go to Gozo. Stop whining and grow up. YOu cannot have everything for free. You need to get your priorities straight. YOu have to buy less junk. Concentrate on what is a necessity. Food, shelter, fuel are necessities. The key is to cut the waste out.
ALBERT FENECH(on 7/11/09)
Naturally, we shall never know the truth and the whole truth...that is the ilk of our governmental administrations. Are we paying for current financial "shortfalls" or are we carrying past debts incurred by Enemalta and the Water Services Corporation - which many suspect is the real truth and reason behind further price hikes? So let's put this into perspective; successive Government Ministers and their appointed fawns have shown gross negligence, inefficiency and waste and allowed the debts to pile up. The negligence has not resulted in recriminations, resignations or dismissals. No sir! The result is that the consumer has to make good and foot the bills. Now, when Alfred Sant as Prime Minister in 1996 tried to sort this situation out by courageously taking the bull by the horns...but let's not go down that alley!
Robert Caruana(on 7/11/09)
INCREDIBLE.......Have a look at the ENEMALTA MANAGEMENT SALARIES just presented in Parliament:

http://www.kullhadd.com/200910311047/Ahbarijiet/ic-chiefs-tal-enemalta-bsalarji-fenomenali.html

The packages exceed the renumeration of the President and the PrimeMinister.

The lease from such highly paid management is to have the company run efficiently and not
pass on the inefficiencies to the general public.

Eric Camilleri(on 7/11/09)
Are Maltese families in a position to manage paying these increases ?

With €74.9 million attributed to higher oil prices, how much of this value are Government Taxes ?

Should an investment of €10.7 million in new sewage treatment plants be forcefully financed by the Maltese consumer or on the basis of EU's Environmental obligations be actually financed by itself ?

So Enemalta's resolve to compensate for its huge inefficiencies by smart meters and a new Delimara power station must be paid for by the Maltese consumer right ?
Mike Magri(on 7/11/09)
@."... Cost amounting to Euro 85.6m to be borne by consumers.." Minister Gatt, alias PM No:2

Meaning obvious Negative Repercussions` effects on:
1. On Commercial `Consumers` = MORE costs on production and service companies and shops of all kinds = MORE expensive products and services for `sale` = LESS purchases...

2. On Household Consumers = LESS Spending money, thus surely exploding the very slow and dangereous Economical Activities going on to-date. = LESS generation of income to government from VAT and various other taxes, etc.. = MORE taxes...!!

Causing:
a. A VERY NEGATIVE AND DANGEREOUS RIPPLE EFFECT TO THE ECONOMY IN GENERAL.

b. WILL SURELY RUIN COMPLETELY ALL OF OUR LITTLE LIFE STYLE WE HAVE LEFT....

SOLUTION = ANNOUNCE THE BUDGET AND... C A L L A N D E L E C T I O N...

Q..R...I...D...T...U...N...A... K...I...S...S...I...R...T...U...N...A... F..A..Q..Q..A..R..T..U..N...A...
Matthew Borg(on 7/11/09)
It's time for some much needed competition in this sector! All Enemalta and the WSC know how to do is raise prices all the time and provide an overall inadequate service.

Poll

Do you agree with proposals made to the European Parliament for maternity leave to be extended to 20 weeks?

  • yes
  • no
  • don't know
  • don't care


View results

Fun Stuff


Play Sudoku