Matthew Xuereb
Utility rates 'highest in Europe'
'Resources authority acted like a rubber stamp'
The revised water and electricity rates make Malta's tariffs the highest in Europe and will result in a 49 per cent increase for businesses, according to the director general of the Chamber of Small and Medium Enterprise - GRTU, Vince Farrugia.
To add insult to injury, he told a press conference yesterday, businesses would also incur an extra cost of between 16 and 25 per cent for water once the new rates come into force on January1.
Mr Farrugia said such high tariffs, announced a week ago, would force many businesses to raise prices, lay off workers or even shut down, adding that the GRTU would support any action at the level of the Malta Council for Economic and Social Development that demonstrated solid objections to these tariffs.
According to GRTU studies, about 42,000 business accounts would have to fork out an extra €36.35 million next year to cover the utility rates' hike.
Contrary to what the Prime Minister had said, the new tariffs were substantially higher than the tariffs rashly imposed in October 2008, Mr Farrugia insisted.
The new tariffs were the direct result of 20 years of inefficiencies of Enemalta and the government's failure to adopt policies to address them. He said Enemalta could get away with increasing its tariffs haphazardly because it had a monopoly and was the only energy provider in the country, giving consumers no alternative.
He said the GRTU had no confidence in the board of the Malta Resources Authority and it should either explain its decisions or resign. The same, he said, applied to Enemalta's Fuel Procurement Advisory Committee, responsible for oil purchases.
Mr Farrugia insisted the EU Electricity Directive obliged the MRA, as the regulator, to safeguard the interests of small businesses. Not only did it fail to do this, he added, but, for the second time in two years, it did not consult any stakeholder on the matter. That was absolutely unacceptable.
According to the GRTU's workings, 37,000 of the 42,000 non-residential accounts would see an increase of between 41 and 56 per cent, with the lowest increase being experienced by those who used between 10,000 and 20,000 units a year.
Mr Farrugia said the MCESD had to be given the facility to investigate the findings of the MRA in order to ensure it had fulfilled its regulatory role and was not simply rubber-stamping. There should also be an MCESD representative on the Fuel Procurement Advisory Committee.
Should the MCESD find that increases accounted for more than 20 per cent, a bank guarantee support fund should be established to support SMEs for payment of the tariffs, he said.
"The GRTU is not an organisation that participates in political crusades but when the system of consultation collapses, representative bodies will be forced to take action beyond the realm of social dialogue," he said, echoing the united voice of social partners who have, over the past days, requested an urgent MCESD meeting to discuss the tariffs.
He said the micro-credit support scheme announced in the Budget 2010 and the €2.5 million fund to assist businesses, also announced in the Budget, had to be implemented immediately.
In the meantime, the GRTU is setting up an advisory service to help enterprises obtain access to new finances, mitigate dismissal of employees or eventual closure.
Meanwhile, the opposition utilities' spokesman, Joe Mizzi, filed a judicial letter contesting the MRA's decisions on the new water and electricity tariffs.
He expressed doubts over the way the MRA had acted in justifying the increases. "More than being a regulator, the MRA acted like a rubber stamp in raising the rates when oil prices have gone down," Mr Mizzi said.
He pointed out that other court action he took against the MRA and the Fair Trading Department were still pending.
Labour leader Joseph Muscat said on Sunday that Enemalta's requests to the MRA were inflated by at least €5 million.
37 Comments
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Marco Cremona
Dec 23rd 2009, 20:28
Where I agree with Vince Farrugia is the fact that we have a puppet regulator in MRA.
The regulator's job is to ensure that all possible measures should be taken to make sure that the Maltese consumer gets the best deal from our arrogant monopolies. MRA's job is to ensure that government makes sustainable investments that provide best value for money- and Malta's regulator (MRA) has failed miserably.
Government has failed to make any significant investments in our power-stations in almost 20 years. Indeed, MRA has failed to come up with a decent energy policy in its 8 years of existence.
Theft of W&E is rampant and nobody lifts an eyelid.
MRA has allowed WSC to build sewage treatment plants that do not recover a single drop of water for re-use; MRA have also failed to regulate groundwater extraction. Indeed 10,000 private boreholes are sucking our aquifers dry, moving us towards more RO production, and pushing the tariffs upwards. Malta's first water policy is still in a draft form while our aquifers face extinction in 15 years time.
Let's focus on the root of the problem (MRA) not the consequences (higher-tariffs)
Marco Cremona
Dec 23rd 2009, 20:17
Can we assess this issue objectively for once and for all?
No, Vince, electricity and water tariffs in Malta are NOT the highest in the EU - even though the cost of production of electricity and water is probably the highest in the EU. The government is still subsidising these utilities although it is a fact that all subsidies have to go.
This is not to be understood that I am for higher E&W tariffs. I am not, but the price of the utility has to reflect the cost of producing the utility. How can anybody expect cheap E&W tariffs in an arid country that cannot benefit from unlimited water and free electricity (hydropower)?
We have had it easy for far too long. The population has benefited from subsidised utilities for far too long. Malta is still the only country in the EU which does not have a sewage tariff (in some countries the sewage tariff is even higher than the water tariff); waste is still collected for free from our doorsteps everyday; I could go on and on....we are now waking up to the reality of being a developed country.
Joseph W. Galea
Dec 23rd 2009, 10:58
So, what is the cost of a solar power system in Malta to let's say, supply all the heating, cooling and other electrical requirements for an average house with 3 bedrooms etc, anyone knows?
Would the government be willing to subsidize, on a one time basis, some of the initial cost for those who may not be able to afford it?
Roderick Micallef
Dec 23rd 2009, 09:27
I agree with Mr.Francis Borg, without taking political sides as I openly state that I am a true floating voter and in a way proud of it. Instead of bragging about the utilities tariffs which yes are on the top 3-5 of the most expensive in the EU, every one should be calculating and doing their homework and see what can be done, how can we turn this into an opportunity?
I have given up that the government will do something realistically, so instead I just hope that the people in general start doing something.
Nowadays there are a lot of options, the cheapest to install is a solar water heater, and considering the maltese weather it pays off in around 3years (depending on usage). I am not even taking into consideration the government grants because I know a lot of people that didn't actually get a cent back from the government.
Second best is a small wind turbine (must have a good high location ideally) which can generate electricity which is ideally fed into a battery system. Finally PV panels which also generate electricity and nowadays you don't even need an inverter with modern panels.
mario scerri
Dec 23rd 2009, 09:13
Niehu gost nisma l-Vince Farrugia jitkellem hekk. Mid dehra Vince zdied mal-lista tan-Nazzjonalisti maqrusin minn Gonzipn stess. Sur Farrugia rrraguna b mohhok mhux b'qalbek.
Dan jghodd ukoll ghal dawk in-Nazzjonalisti kollha li gew ngannati minn Gonzipn. Li qabel l-ahhar elezzjoni generali kien weghdna li bih fil-gvern se nkunu mohhna mistrieh.
Carmel Cilia
Dec 23rd 2009, 09:13
For those who are still believing the government that the prices have gone up because of the increase in the price of oil I saw a bill of a friend of mine considering a small 3sqr. metre selling outlet. The amount was 154 euros, of these 35 euros were the cost of electricity consumption; there was no water consumption; the rest of the bill that is 120 euros was the cost of the rent of the electricity and water meters plus Vat. Therefore the prices we are made to pay for our water and electricity is just another source of tax to fatten this irrisponsible government of ours. These are the true facts. By the way this small business man is a member of U.H.M. the Union which doesn't seem to be too much worried about these increases.
Muscat. Pat
Dec 23rd 2009, 09:08
@ E. Gatt.
First of all Happy Christmas and a Happy New Year!
Unlike you Mr Gatt, I do not belong; I am an orphan. However, I must admit that at present, my "foster parent" is more likely to be the PL rather the GonziPN. I have stopped being a self made Trappist monk-, happy with self flagellation. Neither do I acquiesce to the whip that pains me, simply because it has blue hues.
Joe E Galea
Dec 23rd 2009, 08:48
Those who hailed the budget should swallow their own words now, as it became a custom that taxes are introduced outside the budget. Thanks Gonzi for a nice Christmas present. The recession in this country is amplified by the totally wrong decision taken by this corrupt no-conscience government. Fejn hi il-kuxjenza socjali li kontu tghajjtu biha?
Where are the blue eyed elves now? Where is the non-Maltese not living in Malta J Martinelli and his fellows?
The PN MP's who have a conscience should have the guts and speak up to take a stand against the bulldozing politics engaged by the Gonzi administration.
philip pace
Dec 23rd 2009, 07:28
To Mr.Francis Borg,
You don't know what you are writing about.
How cheap is the solar system in Malta?
Can anyone note down a quotation for a good quality solar system?
Mario Cachia
Dec 22nd 2009, 23:05
I understand that most people are focussing at their needs.
But as a youth still at University, can someone please tell me how I may someday marry and have a family? Buying an apartament with a huge loan and living in it. From January as soon as the prices will rise many of us will lose their jobs, increasing the inflation (since businesses will need to raise prices to compensate), the number of people registering will increase, and the government will fork out more money... and to compensate higher taxes. and so on and so forth
We need someone who has brains to lead a country, which unfortunately at present we do not.
Promoting investment and business will bring more money, and more purchasing power. If people have more money the more they will buy. The more they will buy the more VAT and taxes etc. The more they work the more income tax.... This is how it should be Dr. Gonzi to overcome deficit. But at long last... what can my tiny mind do near a god Gonzi and his minions?
C.camilleri
Dec 22nd 2009, 21:07
@ pn apoogists
I, hope you wont blame Joseph Muscat or Alfred Sant for the bashing that Vince Farrugia PN MEP candidate and Grtu director gave the PN government vis a vis the revised HIGHER utility tariffs
Now just who is moaning and being all gloom and doom?
Francis Borg
Dec 22nd 2009, 19:31
It is true that Malta will now rank amongst the top end of utility rates having checked the calculator. Italy is known to be the highest in Europe for electricity prices and Malta is now in that league. However we must remember that Malta has 'enjoyed' the lowest rates for many years and now it is catching up. There is a simple way to deal with this. While here in the UK we have a dark and horrible winter you are all enjoying the bright yellow disc in the sky with a temp of 17C. Surely it is not rocket science to work out quickly the benefits of installing solar heating / electricity for many people using all those lovely flat roofs which would easily replace the equivalent of the delimara extension to the power station. Wake up Malta, you can have cheap electricity and heating with a bit of effort on everybody's part. Don't just complain do something about it.
Francis Borg - Liverpool
j micallef
Dec 22nd 2009, 17:49
Whilst common household residents and businesses big and small lament about the new utility tariffs which are now the highest in Europe, please spare a thought for the plight of old-age pensioners like me who scraped through a whole lifetime of employment to be able to buy a few rooms near the sea to use during Summer. This administration, in its infinite wisdom and utter lack of sensitivity towards those who - like me - have to rack their brains to be able to make both ends meet by stretching their pensions to the limit, has decided to place even a greater burden on us. Few perhaps realise that utility tariffs for summer residences have been made even steeper and more incisive than those of normal residences. Does this administration think that owning a summer residence means that one is on the rich and affluent side of the community? Or is this administration telling us to do away with our seaside property and do without our last remaining titbit of enjoyment we have left in our old age? Will someone from the MRA, or Enemalta, or the PM and any of his Ministers tell us why this discrimination against us?
D. Xerri
Dec 22nd 2009, 17:25
Mhux wiehed mhux tnejn mhux tlieta mhux erba IMMA Hamsa ghall PN fl-Ewropa Sur Vince se jkollna - Ghax bis-sahha tal-partit li kkontestajt mieghu int Sur Vince Farrugia Malta tista tghid li ghanda rekord gdid taht il-Gvern ta GonziPN - The Highest Electricity Bills in all Europe
Robert Callus
Dec 22nd 2009, 17:17
Our politicians only plan with a maximum of 5 year vision. No big surprise then that only 0.01 of energy comes from alternative sources.
Colin Camilleri
Dec 22nd 2009, 16:56
Oh yes Prime Minister Gonzi - you and your party has the best recipe to promote investment locally and attract new ones from abroad - we have the highest utility costs, the lowest reliability, worst infrastructures and lowest wages around. That makes us a highly productive and motivated nation. Allegedly, foreign investors can't wait to start their operations from Malta.
Thanks for improving the standard of living of the locals. Well done to you, your party, your ministers and last but not least - to the ones that voted you in office!
Jos Vella
Dec 22nd 2009, 16:37
@ victor borg
you are right to say that Mr Farrugia will not agree with you; at the first opportunity Vince will once again forget about the GRTU and goes back siding the present government.
Let the utility rates rise and rise perhaps those who are fast asleep still thinking that Malta kollox ward u zahar under the present government...finally feel some chill coming up through their legs and wake up!!
Gonzi is right in saying that there is no issue in Malta...the last gabra tal partiti the same businesses cotributed €400k+ to the PN, so Farrugia is wrong in saying that one would expect businesses to shut down; I encourage businesses to decrease their contributions to political parties and keep the employees at work instead!
I Abela
Dec 22nd 2009, 16:20
We already knew that our rates are the highest in Europe, so we should be READING BETWEEN THE LINES. Vince Farrugia was a PN candidate for MEP so why is he now attacking vociferously the same party he was contesting with. Why is he calling Gonzi a liar. Why not leave the dirty things to the GWU Vince? In my personal opinion this is the beginning of the end for Gonzi. PN can't govern any longer because the money box is empty. But they won't just call an early election just like Sant did, because everybody knows that Sant will always be remembered as the man who lost the government after 18 months. Gonzi doesn't want that kind of reputation, so his brain is working 24 hours a day to find a good excuse to resign and blame somebody else. And here comes Vince Farrugia to shake things up, hoping the GWU, MUT, and other unions would take on the issue more aggressively, and then comes the PL riding the bandwagon to shake things even more. Once everyone is in the mix, a good excuse to resign will not be very hard to find and put blame on someone else.
E Gatt
Dec 22nd 2009, 16:16
@Pat Muscat
According to the 2007 financial statements Enemalta employed 1,682 (including 1,132 in the electricity division and 364 in Administration) at a cost of over €34.5 million. How many would you suggest should be fired to bring down our W&E bills? It’s a difficult question and I believe that both ‘my’ party (PN) and yours (MLP) do not have the political will to tackle effectively.
mario gellel
Dec 22nd 2009, 15:57
@E.GATT
IF I HAVE TO AGREE WITH YOU ON WORKERS LAYOFF, IT HAS TO BE THE ADMINISTRATION ONLY THAT NEEDS TO BE LAYED OFF. THEY ARE THE ONES THAT ARE MAKING BAD DICISIONS AND BEING PAID THOUSANDS OF THOUSANDS OF EUROS.
n. saliba
Dec 22nd 2009, 15:40
I really think it is true that we have the highest utility rates in Europe.
I heard it in the grapevine that not even the PM himself could afford to put on the Xmas lights at his private residence. (perhaps he might think about it on Xmas Eve and Xmas Day_
victor borg
Dec 22nd 2009, 15:34
I am afraid our friend mr. Vince Farrugia is not going to agree with me but instead of complaining why not help us getting rid of a government with a big problem spending
like money grows on trees gonzi pn money no problem and then we have to pay through
the nose
m attard
Dec 22nd 2009, 15:02
@ laurence schembri
Thank you for that information... I always wondered what people who live in freezing temperatures pay for their electricity. Are there any other readers who can give us more real examples please?
Muscat. Pat
Dec 22nd 2009, 14:05
Objective comments from the "hear no evil, see no evil and do no evil" PN bloggers brigade are welcome.
Joan Spiteri
Dec 22nd 2009, 13:17
Hi all. It seems that someone is been taken for a a ride or else its incompetence. I have a 120 SQM apartment in Stockholm and pay the equivalent of Euro 650 per year including heating. My sliema apartment is 140 SQM and bills are of Euro 1650 per year. one quick question. what is the point of trying to justify actions taken by the PN government all the time??
Russell Fenech
Dec 22nd 2009, 12:40
Mr Vince Farrugia should be thinking of changing his battle cry from "mhux wiehed, mhux tnejn, mhux tlieta... imma hames deputati nazzjonalisti jixirqu lil dan il-pajjiz" to "mhux ir-raba', mhux it-tlieta, mhux it-tieni... imma l-ewwel pajjiz bl-aktar tariffi gholja fl-Ewropa"
G.Pisani
Dec 22nd 2009, 12:21
And Ebay keeps growing and our businesses diminish and there is no work for the Maltese. Gonzi is inviting the recession to come to our country. Us Maltese always complain about high prices in Malta,but how can a business stay open with these tariffs? Remember most of us work for a business. Hotels, restaurants, shops, clinics etc they are all businesses. If these closes where we will work?
E Gatt
Dec 22nd 2009, 12:14
The joy of state-run entities!
We have to remember that Enemalta is a government entity and nobody can deny that government entities are often notoriously inefficient. The government has privatised many ex-state sectors and all privatisations have been an upward struggle because of stiff opposition. Unfortunately we live in a small country which probably means that we cannot privatise Water and Electricity and enjoy the benefits of scale. This does not mean that Enemalta cannot improve its efficiency and workers’ productivity.
The question is, are we (consumers, political parties, business interests, unions) ready to accept a radical reform at Enemalta? Are we ready to accept that we do not have oil (or water for that matter), and that oil/water will become more expensive in the future? Are we ready to accept greater efficiency and lower utility rates at the cost of mass lay-offs at Enemalta?
J Azzopardi
Dec 22nd 2009, 11:57
Welcome to our world Mr Farrugia.
Evarist Saliba
Dec 22nd 2009, 10:59
As two state owned monopolies providing essential services to the nation, Enemalta and the Water Services Corporation must be accountable and transparent as no other commercial enterprise. This has been sadly lacking for as long as one can remember, and the situation has not been helped by the political handling of the issue.
A completely new approach is required if the public is to have confidence in these enterprises, while both political parties shold rise above short-sighted perceived political advantages in tacking the matter.
Anthony Pace Gouder
Dec 22nd 2009, 10:48
Dan mhux xejn hlief mod car ta' kif dan il-Gvern qed jintaxxa il-Poplu . Fija hafna x'tifhem meta iddikjara li s-sena ddiehla JRID jigbor Euro 74,200.000 mill-kontijiet ! Xi proponiment dak !
Illum sar magharuf li ntefqu Euro170,000 ( c. Lm71,000) fic-celebrazzjonijiet tal-Piazza tal-Palazz . Money NO PROBLEM ?
EDWIN DE MARCO
Dec 22nd 2009, 10:44
It's a great pity Mr. Farrugia never got to make it as an MEP. Surely he could have convinced all european countries to fork out an extra 100 million euros each to help us in our suffering!
Galea. L
Dec 22nd 2009, 10:15
What have you to say about this J Martinelli?
Vince Farrugia was one of the MEP's contesting on behalf of the PN.
mario gellel
Dec 22nd 2009, 09:22
@to all Unions
IT IS TIME TO UNITE. WE AS WORKERS HAVE HAD ENOUGH OF THIS GOVERMENTS MISHANDLING AND ARROGANCE. WE ARE IN A SITUATION WHERE WE CANNOT MAKE ENDS MEET. TAKE OFF ALL YOUR CARNIVAL MASKS AND FOR ONCE STAND UP AND PROTECT WHOM YOU SHOULD BE PROTECTING.
g.c.Forte
Dec 22nd 2009, 09:22
Thanks God, at least we came the highest in something. I am sure that the P.N. bloggers are in heaven, and soon they are going to make their comments.
laurence schembri
Dec 22nd 2009, 09:20
I have been saying this for a whole year. In my flat in Nurnberg I pay some €580 per year, this include, Electricity, Water, Hot Water (bath and kitchen), Central Heating and Air- conditioning (all communial). Admittingly I am not there all the year round but, from time to time is used by relatives. Just think, the Central Heating is on for at least five months a year. What Vince Farrugia ought to be saying is, how about the families that need to heat their homes in the months of winter, the price of gas have shot up by approx 100%.
Lawrence Gauci
Dec 22nd 2009, 09:03
Thank God the government gave us a good COLA hahaha