‘Lower utility bills will not be financed by higher subsidies’

A pledge to reduce utility bills, which is likely to be a central electoral plank, will not be financed through higher subsidies, the Labour Party is insisting.

The promise will be fulfilled by adopting “new technologies” and ensuring the “active involvement of investors”, a spokesman said yesterday.

He did not explain what the new technologies were or how investors will be involved.

The PL was reacting to comments by Finance Minister Tonio Fenech earlier this week who admitted that making Enemalta financially viable was possibly “the nation’s greatest challenge”. Mr Fenech said that utility tariffs would not go up despite rising oil prices – a reversal of government policy – and asked Labour to come out with its own solutions for the beleaguered energy company.

Enemalta has about €600 million in accumulated debt and, after rating agency Standard & Poor’s last week downgraded the company, the government announced it was absorbing €25 million in costs to lighten the burden.

But Labour pounced on this decision to turn the tables on the government.

“GonziPN was until some weeks ago saying there was no other option but to raise bills if oil prices go up. Now that international prices have increased, the Finance Minister has made a U-turn by saying that the electricity bills will not be put up.”

The party spokesman said water and electricity bills would be reduced in “a realistic and sustainable manner” without undermining Enemalta Corporations’s debt repayment.

Criticising the government for reneging on its duty to ensure Enemalta repaid its debt over the past 25 years, the spokesman said this resulted in a “significantly higher” return on capital employed (ROCE) – a percentage added on to utility tariffs to recoup investment expenditure – than other EU member states.