Finance Minister Tonio Fenech yesterday announced that the government was finalising a debt restructuring plan for Enemalta Corporation, over 25 years to help the corporation enter into ambitious challenges. This restructuring plan was already reflected in the present tariffs.
Introducing the motion for Parliament to approve the corporation's estimates for 2010, he said the government was discussing with the banks to create a mechanism outside Enemalta, to hold its assets. The value of the assets would then be lent to the corporation.
With such a plan, Enemalta's debts would be cleared over a span of 25 years, thus enabling the corporation to invest and be in a stronger commercial position.
Mr Fenech said that consumers who paid their utility bills on time should not be made to carry the burden of those who, capriciously and not because of hardship, failed to pay. He maintained tariffs had to be paid within 45 days and if not, interest would be applied at six per cent.
Users not paying on time increased Enemalta's debts because the corporation incurred interest on its debts immediately, not after 45 days.
Earlier, Mr Fenech said the estimates showed that one of the corporation's major challenges was the purchasing of oil because prices fluctuated.
Enemalta had other challenges, such as to provide affordable energy. It also had financial problems because it had to reduce the impact of the price of oil on the consumer. Giving the people an impression that energy did not cost anything and that it could be subsidised forever jeopardised the corporation's position.
Since the aim was to recover expenditure, Enemalta's outstanding debts were not being considered. The Delimara power station was still unpaid for, and Enemalta carried its dues.
Three years ago the government had decided that in such circumstances, people should pay the just price for the energy they consumed. The tariffs therefore did not only reflect the price of oil, maintenance and salaries but they also covered investment.
Enemalta had a legal obligation not to make losses. Yet, it had €500 million in accumulated debts. If such decisions were not taken, institutions that lent finances to the corporation would no longer do so. It was Parliament's responsibility to ensure that the corporation abided by law to recover its losses.
But the government could not ignore its social responsibilities. Enemalta should only serve its commercial nature, he said.
The government had introduced several policies to help people. It had also given benefits to those households that did not consume more than 10,000 units. With such policies, people had more disposable income.
While people were affected by higher utility tariffs, the government had not increased taxes: it had reduced them. But people were responsible to pay for their energy consumption. The government had left €152 million more in people's pockets and people were expected to pay the bills.
If the government had not taken such decisions in time, the country would have suffered problems of unemployment and financial uncertainty.
Mr Fenech said that while the national debt amounted to 69 per cent of what the country produced, the government had stabilised the economy. Balancing the social, economic and financial aspects had helped unemployment to decrease by 214 persons.
Those who argued that the government had increased tariffs to solve the deficit were wrong. But if the government had not increased such tariffs, the deficit would have been much higher.
During discussions, the MCESD had acknowledged this and members had analysed what could be done to increase the economy. The government had spent €400 million on oil. The solution was to move forward, to invest and increase the economy and to have more employment to make up for bills.
Mr Fenech said funds were available to help an industry facing temporary problems to save employment. There were also policies to help families to reduce and use their consumption better. The government had distributed energy saving bulbs, a policy that had reduced consumption by €6 million. It had also introduced other incentives on solar water heaters. Consumption had been reduced by nine per cent in 2009.
The decision to fully recover Enemalta's costs was sensible, he said. But the government had not stopped there; it had still helped people in need.
Mr Fenech said that one should keep guaranteeing energy in the best way. He referred to the extension of the Delimara power station, which would cost €165 million.
Malta should meanwhile abide by its obligations to reduce emissions and carbon footprint. The machinery to be installed afforded the possibility to operate on gas with only a few changes.
He referred to the €200 million tender for the cable between Malta and Sicily, which was an important project as it widened the possibility for more energy availability.
Enemalta would be investing in a new state-of-the-art technology that would allow a problem in the distribution lines to be detected and resolved, even before a power outage took place. This technology was known as SCADA and should be available over the next two years.
Opposition MPs Marlene Pullicino, Gino Cauchi, Gavin Gulia, Joe Mizzi and Carmelo Abela as well as Nationalist MPs Ċensu Galea also took part in the debate.
When Mr Speaker put the question to the vote, the opposition asked for a division, to be taken at a later date.