'Book value of power stations not exceeding €40 million'

Opposition spokesman on resources Joe Mizzi said that, while the people were burdened with higher tariffs to pay for the €200 million pending debt for the Delimara power station, all machinery and equipment at both power stations had a total book value which did not exceed €40 million. But no one in government felt responsible.

Speaking in Parliament during the debate on the motion to approve this year's estimates of Enemalta Corporation, Mr Mizzi accused the government of having failed to make the necessary investment. The government was criminally responsible for today's energy situation. The country did not even have an energy plan and Enemalta was far from being in line with EU directives on curbing pollution.

While the government had never heeded opposition concerns on the need to be energy-efficient, the minister was now calling on Parliament to take responsibility for saving Enemalta. It was only now that the minister was saying Enemalta was facing serious challenges.

Mr Mizzi said that a report on renewable energy, which former Prime Minister Fenech Adami had announced in 1994, had never materialised. The government had claimed that the Delimara power station would solve all problems, but later it had transpired that it was already obsolete.

The ideal system for meeting energy challenges in Malta was the adoption of a solar thermal system making use of coastal waters, a proposal made to the PN government in 1996.

Mr Mizzi denied the minister's contention that Malta had a capacity of 500 megawatts, adding that only 159 megawatts were available with not enough spare capacity. This was one of the reasons for the frequent power cuts.

Beside serious problems in energy generation, there were also others with the electricity distribution. The switching networks for Pembroke and Kappara were not yet ready.

If the extension to the Delimara power station had been ready in 2008 or 2009 as had been promised, the country would have already saved €78 million besides reducing the black dust after Enemalta had switched off the precipitators at the Marsa power station.

With technologies used abroad, databases of sources had been established based on the signature of soot emitted by different sources. Had Mepa considered the use of any of these technologies?

Utility tariffs had impoverished the population, and although the government had been speaking on the use of alternative energy, nothing concrete had been implemented.

Opposition utilities spokesperson Marlene Pullicino said that, before the election, the Prime Minister had said subsidies were necessary for socio-economic reasons, but now the same Dr Gonzi had had a change of heart. The opposition had never asserted it did not agree with the full recovery of costs, but this surely was not the time for such a burden to be imposed on the people. To add insult to injury, the government was also endangering people's health, as attested by the black-dust phenomenon.

The Delimara power station, which never had proper ways to tackle its exhausts, was producing a high concentration of sulphate - three per cent. This was an unacceptable situation, considering a €500-million debt on the power station and the fact that everyone knew of the dangers of such emissions. The people were in the dark as regards the disposal of the hazardous waste.

Irregularities had also been noted in the second stage of the applications for the power station development permit. This not to mention that works had started without a permit.

Dr Pullicino said Mepa had also allowed the Marsa power station to operate without an integrated pollution and prevention control (IPPC) permit.

The Minister of Health should have never said that from 2008 to 2010 the occurrence of cancer had reduced in people living in the south of Malta. Reduction in two years did not mean that people were not prone to suffering cancer in the future.

Gino Cauchi (PL) said that for most people, Enemalta meant higher electricity tariffs, BWSC, black dust and power cuts.

The heavy increase in tariffs was impinging on the quality of life of the Maltese, as evidenced by the Eurobarometer survey. The order of the day of people struggling to make ends meet consisted of electricity bills and the anti-social attitude of people at ARMS Ltd, the company formed by Enemalta and WSC to collect dues.

In 2009, 380 pensioners, 2,700 residences and 240 businesses had had to enter into a payment agreement with Enemalta because they had defaulted on paying arrears. Between January and April this year, these figures read 400 pensioners, 1,775 residences and 490 commercial entities.

Hoteliers had expressed concern that they had not yet received their utility bills for the first quarter of this year. He claimed file checkers had a seven-month backlog because a new IT system was always giving trouble.

On BWSC, the Auditor General had been clear in his report and it was shameful that the government tried to defend what had taken place.

The black soot over the southern area was a perennial problem that the government did not have the slightest inkling of how to solve. The government should give more weighting to people's health when taking major policy decisions.

Concluding, Mr Cauchi said Enemalta had failed in its obligations to the people.

Gavin Gulia (PL) said since Dr Gonzi had taken over the running of the country in 2004 the administered prices had consistently gone up by 14 per cent per year. One of the reasons for this was the utility bills, which were the highest bills in all of Europe.

Dr Gulia said he was very concerned for business in Malta, which was facing a very bad situation, especially for retail. The problems were now also spreading into the professions, including the health sector, and the rest of the real economy. They all had cash-flow problems because of the apprehension about expected utility bills.

The opposition was not alone in speaking about this: the GRTU and the tourism sector had also expressed themselves.

There had been more business in the worst days of the international crisis. The cash-flow problem was now affecting not just the retail but also the wholesale sectors. Families were the best consumer overall, but with highly-increased costs and stagnant wages the consumer could not be blamed for holding back.

It was no use for the government to boast about economic growth, because the real economy was not giving the same readings. There was no economic sector that was not feeling the massive pinch in sales.

Concluding, Dr Gulia said the government had some good ideas, but not putting them into practice was tantamount to having no ideas at all. The announced micro-credit scheme had lost another year with none of the promised benefits to the self-employed.

Ċensu Galea (PN) said that Enemalta continuously found itself having to make choices and decisions for the production of clean and efficient energy that would comply with all the obligations imposed on the government. Such obligations included the environmental impact of the power station which affected both the air and the landscape on which it was built. It was good that Malta had improved its environmental conscience.

Various important decisions had had to be taken in considering the eventual closing down of the Marsa power station. It was natural that controversies would arise with regard to such an important project.

Mr Galea said that apart from the Delimara project the government was also seeking to give to the people another alternative - the wind farms. This project was really important, even though an in-depth discussion would have to be undertaken in order to come to firm decisions.

Energy should be considered not only from the financial point of view. Alternative energy was important even though it would not be cheaper. No one must think that the government was going to succeed in reducing its energy expenses if adopting wind farms.

Enemalta had had to invest in the various distribution centres around the islands, and then see that this energy would eventually be transferred to households.

One also needed to address the problem of small villages around Malta and Gozo which still did not have access to electricity. This was a shame, considering the size of the country. Few as they were, these places had a right to electricity. It was Enemalta's job to solve these problems.

Concluding, Mr Galea referred to sports clubs and sports facilities. Even though Enemalta had decided not to be a source of subsidy to sports clubs, it had to come up with a project to guarantee efficient supply to the various sports facilities around the country. This was in line with the corporation's first responsibility, a consistent and efficient supply of electricity.

Carmelo Abela (PL) said that the government was not sincere in the Enemalta situation. While opposition exponents had argued that the system was unsustainable, the government argued that the former were alarming and not stating things as they were. Yet everyone agreed that there should be an extension to the power station.

There was political dishonesty. The main problem was that government members never admitted that they committed mistakes. They either blamed things on the recession or on the Labour Party.

The government could not waive its responsibilities for Enemalta. Minister Fenech had said that Parliament should find the solution, which meant rectify the government's mistakes. But it was the government, not Parliament, that should direct the corporation.

Families and the industrial sector were all affected by the revised utility tariffs. For all the government's talk that there had been discussions with the MCESD, these had not been whether one should increase such tariffs but what should one do once they were increased. The government said there were funds to help companies, but it should also state the required procedure to apply for such benefits.

Mr Abela said these tariffs affected the county's competitiveness. They had not been increased due to oil price only, but also other factors, such as investment and Enemalta's inefficiency. Inefficiency should be curbed. The Full Cost Recovery Plan was important, but the PN in opposition did not recognise this.

While one should strengthen Enemalta financially, the people should not be burdened excessively through their bills. Certain ARMS Ltd employees must be criticised for their arrogance and the lack of information they gave to people. Some had told people that they only cared that the bills were paid.

Concluding, Mr Abela said that the utility tariffs reflected Malta's competitiveness. These were among the highest and thus put Malta at a disadvantage.

Winding up the debate, Minister Tonio Fenech said the EU statistics on the impact of the recession on families must be considered in the light of all the questions put. The government had always acknowledged that the tariffs had placed a burden on families, but the increase was to be considered in context. In four consecutive budgets the government had reduced income tax and increased children's allowance, leaving more money in people's pockets.

The questions raised in the survey showed that any strain had been put on people throughout the EU bloc. When the statistics spoke of how many persons ended up without money to pay tariffs, the resulting percentages indicated that these were decreasing.

Mr Fenech disagreed with Dr Gulia and the GRTU, and said that economic growth had taken place in all sectors including the rental market, hotels and restaurants, and the manufacturing industry. But Malta still faced challenges and should be watchful of the economic situation.

Only three of more than 500 businessmen had indicated they were worried about tariffs, and only due to the nature of their business. The rest had been more concerned about measures of increasing their business. The government had helped SMEs through a number of schemes, including micro-invest and support for use of alternative energy, and the government was still working towards micro-credit. The government would continue to assist business.

He also disagreed with Mr Mizzi, stating that Malta did have an energy plan drafted by Enemalta for 2006-15. But since it covered a long stretch of time its proposals had had to change over time to reflect realities. It had been established that the infrastructure could not support gas, as originally planned, and the government had opted for a power station that provided the possibility to change to gas when the technology allowed this.

Although the book value of the power station machinery stood at €40 million, this did not mean that the corporation had to pay the balance of its liabilities.

It was only after paying these liabilities that investments could be increased. On the possibility of buying electricity from Sicily, he said that discussions were underway with Terma, and that the capacity for generating electricity did exist. Malta would be linked to the best-serviced area in Sicily.

On Mr Abela's comments on the position of industries, he said that €2.5 million had been allocated to these industries and any business could approach the Chamber or the GRTU. They would subsequently follow an application procedure regulated by Malta Enterprise.

Minister Fenech said that more than 2,500 jobs had been saved, funds to Malta Enterprise had been increased, new projects had been started and factories expanded.

Hotel bills had been issued in May on the request of MHRA.

Concluding, he said the government was committed to the environment and over the years had greatly reduced the sulphur content of the heavy fuel oil used for the power station. Bur this came at a cost that only the current economic standard could sustain.