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Thursday, November 22, 2012, 10:00

Update 2 - Enemalta subsidies to be retained, power tariffs will not be raised - Fenech

Updated - Adds PL, Konrad Mizzi reactions -

Finance Minister Tonio Fenech said this morning that Labour was trying to deceive the people in the promises it is making to reduce energy tariffs.

The Labour Party, in a reaction, stood by its promises and noted that the government did not know how much electricity imported from the undersea cable would cost.

Speaking at a press conference this morning, Mr Fenech said the PL's 'energy spokesman', Konrad Mizzi, was making conflicting and misleading statements.

He noted that Mr Mizzi had said that a Labour government would not raise the subsidy given to Enemalta - currently €30m. This implied that in order to implement its promise, Labour would have to raise taxes, Mr Fenech said.

He said the subsidies were keeping tariffs stable and the government had decided that they would be retained in the Budget and tariffs would thus not be raised.

The minister noted that Mr Mizzi had also said that Labour would employ cheaper technologies and he had mentioned two. The first was the Sargas proposal for a floating power station about which there were many questions relating to its feasibility, the environmental implications and the fact that it would take five to seven years to commission.

The second option was to use more environment-friendly power generation plants. The government, Mr Fenech said, had carried out studies on using natural gas. However just installing a gas pipeline from Sicily would cost €334m, twice as much as the electricity cable from Sicily. This would put upward pressure on the electricity tariffs even though production of electricity through gas was fractionally cheaper. Furthermore, no one knew how gas prices would fluctuate in the future, particularly in five years' time, the minimum time required for such a project to be commissioned. By that time it was likely that gas prices would be higher than today.

The possibility of building an offshore terminal on Hurd's Bank was being investigated, but the costs would not be much lower than a gas pipeline.

Other options was to use liquefied natural gas, which would require an investment of €275 million to build huge gas tanks in Delimara, ruining the environment. Another option was  to use Compressed Natural Gas which would require the purchase of at least three specialised ships and make Malta reliant on them, despite the ravages of the weather and other considerations.This was too risky for security of supply.

Mr Fenech said the government was considering the possibility of a gas pipeline, but only if substantial EU funding was available, thus ensuring that the financial burden was not transferred to the tariffs.

All considered, Mr Fenech said, it was clear that to reduce the tariffs for consumers, a Labour government would have to raise taxes for everyone. The people, he said, should not be deceived.

PL REACTION: THE MINISTER DOES NOT KNOW ANYTHING

In a reaction, the Labour Party said Mr Fenech knew nothing about the energy sector.

It said the government had no credible energy policy and Mr Fenech was responsible for the procurement of the €157m BWSC power station which uses heavy fuel oil and does not work yet.

It would be better for the minister to await the PL electoral programme, it added.

The party also reiterated its claim that according to the EU’s Autumn Economic Forecast, the government would raise the tariffs again after the election.

In his more detailed reaction, Dr Mizzi said Malta’s electricity tariffs were much higher than those of other EU countries and European Union counterparts and this was putting a lot of pressure on both households and industry.

The Prime Minister had the opportunity to invest in a clean gas power station which would have resulted in lower tariffs and a  significant improvement in  health and well-being. Howeve, Malta had commissioned a power station fueled by heavy fuel oil after changing the country's environmental legislation. 

He said the plans for the undersea cable were a positive development, but the government did not have a robust commercial plan to procure electricity from Europe.
"Government has invested €200 million and does not have an indicative price for buying electricity over the cable," Dr Mizzi said.
Dr Mizzi said that the minister had also admitted, on TV, that  wind energy, which accounted to 40% of Malta's clean energy target, was failing.
Dr Mizzi said the PL would reduce the cost of electricity generation which, in turn, would reduce the need for Government subsidies to Enemalta.
"We are saddened that Tonio Fenech has given up on making Enemalta competitive and his only response to our energy challenges is to provide subsidies to Enemalta which only alleviate a small proportion of the pain the tariffs are causing to our economy. This does not address the core problem which is the cost of electricity generation," Dr Mizzi said.
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Brian Gatt

Nov 22nd 2012, 14:48

@ George Cutajar,
Really George did you read the article about Sargas in this same newspaper , the only issues we have to factor in or actually factor out is the incapability of the persons (clique) responsible for the massive obscenities occuring all around us whose costs are coming out of our pockets. Eliminate those factors from the equation and you have huge cost savings !!!!

Mario Scicluna

Nov 22nd 2012, 14:01

Best comment today! Proset! Possibly these usual GonziPN apologists would still grumble and mumble between their teeth BUT will not reveal in public! Ma tarax! I would bet that their microwave will be relegated to the basement, Investment in some cemetery candles is never a bad idea! Eh bilhaqq, qatt ma jinqata d-dawl hux! L-aqwa li mmorru niehdu Pizza fil-weekend biex nidru li sejrin tajjeb!

C. Bartoli

Nov 22nd 2012, 17:03

An average family bill is €90 per month. My P.V's and Solar water heater cost me €8300. I received a grant from the government of €3530 (€2880 for the PV's and €560 for the water heater) I took a loan of €4770 which I have to repay in 5 years at 2.8% interest. I pay €57 a month so I am already saving a lot of money while I am repaying my investment and I will save much more once

C. Bartoli

Nov 22nd 2012, 17:05

would have been of almost €400 monthly and one has to bear in mind that when it comes to servicing an replacing parts for premium vehicles the cost is almost 3 times as much as for less expensive Japanese cars. It is all about good budgeting.

C. Bartoli

Nov 23rd 2012, 10:03

@Mario Scicluna, Microwave oven huw l-iktar forn li ma jahliex

D Axisa

Nov 22nd 2012, 12:40

@ Luke Fenech

Kemm inti mghaggel bhal PN....tell Gonzi to go for election and you will know and satisfy your apetite on how they will be reduced. Waht have you to say abt S.Busuttil not wanting to say anyhting abt PN manifesto?

Joe Muscat

Nov 22nd 2012, 12:47

You want answers Luke Fenech? Tell Gonzi to call the election and you'll get answers from the PL just like Simon Busuttil promised. You will have enough time to decide who to vote for. But why waste people's time with your comments. Even if the PL gave you the answers you would still vote GonziPN no matter what....
I want an answer too. How is GonziPN going to get rid of the 5 Billion deficit?

effie stafrace

Nov 22nd 2012, 12:48

mr fenech could you please tell us what answers is tonio fenech given us? from the eu its seems they are asking us to rise tariffs and from mr tonio fenech himself is now making this comments.to tell you the truth i don't care and their are lots of them like me were Mr muscat is going to bring the money to lower the tariffs its enough for us the he gives assurance that he is lowering them.

j brincat

Nov 22nd 2012, 12:48

Did Simon reveal what he would be 'promising' in the PN's electoral programme?

He wants to keep this a guarded secret, so why should the PL reveal what on its cards NOW?

Mind you there's a big difference between what the PN promises and what it actually delivers!


(jb)

effie stafrace

Nov 22nd 2012, 12:53

mr fenech have you ever heard mr gonzi tell us from were he is bringing cash when he is doing these useless projects.i asked several times on tv from were mr gonzi is going to pay the 190 millions euros for the rises to his government employees.no one gave me a decent answer.

Pippo de Marco

Nov 22nd 2012, 12:54

Just like the question, 'Is there an afterlife?' - All will be revealed ( or maybe it won't ).

Mario Scicluna

Nov 22nd 2012, 12:58

Apparently similar to the 'huge' Brazilian firm announced by Gonzi himself ! Supposedly was to 'invest' heavily in Malta! Yeah right 4 persons. Laid off. Hallina

So in turn, I ask you for enlightment. So 1. Is it possible or not to lower enery tariffs? 2. How much is the rate going to be of buying from the Interconnector Sicily-Malta? So far Tonio Fenech ducked the questions, perhaps you'd know

Giovann Attard

Nov 22nd 2012, 13:03

PL Question: How many jobs were created by the Brazilian company which transferred its headquarters from Brazil to Malta according to the PM??
PN Answer: ___________________________________

People want answers and not blank lines, Mr. Fenech!!!

Joseph Fenech

Nov 22nd 2012, 13:18

I cannot agree more with you , Luke. Minister Tonio Fenech came clean and explained all the alternatives. Wizard of Oz Joseph Muscat hasn't come clean yet and when he does the bubble will burst .

D Axisa

Nov 22nd 2012, 12:41

@ J. Pace
Be more specific and tell us how you got to know that PL will borrow money on your behalf?

John Pace

Nov 22nd 2012, 14:45

@D Axisa
It is obvious there is no other way to lower electricity rates and please the people who think that things come free. In 2010 Enemalta paid 12 million euros in interest on loans. It is not only oil prices that push electricity rates up.

Mr.W Cassar

Nov 22nd 2012, 13:02

Could not agree with you more... meter rental is high.

Pippo de Marco

Nov 22nd 2012, 13:23

I agree that on top of the energy tariffs, the meter 'rentals' are a rip-off.

But if I told you that the cheese I got for you cost me €25 per kilo and that the petrol to deliver it cost €5.00 per mile, then would you describe that as 'coming clean' ? Or might you look for alternative cheese suppliers ?

P. Zammit

Nov 22nd 2012, 13:01

Can you enlighten us by what % amount are you expecting your electricity bill to be reduced when your party ( PL ) will be in government ?

C. Bartoli

Nov 22nd 2012, 17:06

Din bhal tal-VAT fiasco ta Alfred Sant fin-1996 gejja. Malli Joseph Muscat jitla fil-gvern kulhadd ma jhallas il-kontijiet jistenna sakemm irahhashom, biex irahhashom difficli ghax kullimkien ir-raw material qed jghola http://www.bbc.com/news/business-19921042, imbghad nivvintaw taxxa gdida biex nghamlu tajjeb ghal weghdiet li ma jistax izomm.

Giovann Attard

Nov 22nd 2012, 13:08

The PN is professional in breaking his own promises! It will be no surprise if the absolute majority of people throw the (shattered) Nationalist Party on the opposition benches after the next general election!! Kemm se ndumu cwiec? Mela veru dak li qal l-Onorevoli Fenech fuqna, li ahna 'cwiec Maltin'??

Anthony Thorne

Nov 22nd 2012, 11:43

He's got his magic wand

Anthony Scicluna

Nov 22nd 2012, 11:11

Higher tariff bands will not subsidise lower bands. The consumption volumes are just not there and it would also result in greater theft or people investing in solar panels. The ONLY way that LP has is to raise taxes.

B Ellul

Nov 22nd 2012, 11:11

Ilhaqt Consulent tal MLP jawaw? Malajr krigt bil konkluzjoni tieghek! Prosit int vera bravu

George Cremona

Nov 22nd 2012, 12:03

Now it is the time for PL to declare and explain clearly its energy policy. Is it keeping its promise to lower tariffs or is it if in government going to invest in alternative energy? Both promises won't work together because the former discourages the later. So PL has to decide which of the two it prefers. Otherwise LABOUR WON'T WORK.

Christopher Pollard

Nov 22nd 2012, 11:11

I think there was a report the other day in the UK press saying that two main companies, Siemens and Bosch, have withdrawn from the Desertec project thus leaving it in trouble.

Vince Deguara

Nov 22nd 2012, 10:43

You certainly are... The article clearly listed all the available options and the costs. Things add up and have been adding up for ages - just many refuse to accept the undeniable...

Julian Borg

Nov 22nd 2012, 10:51

The PN's cards are on the table - the MLP is refusing to place their proposals up for scrutiny for obvious reasons. How can we trust someone that refuses to tell us when and how?

Remember the VAT promise - this is exactly the same - affarikom!

J. Scicluna

Nov 22nd 2012, 10:52

"just many refuse to accept the undeniable..."

How true, Mr Deguara...how very true!

Carmel Zammit

Nov 22nd 2012, 11:06

@ Julian Borg

You claim that the PN's cards are on the table. Can you indicate to me where I can find them. Your statement conflicts with Dr. Simon Busuttil's recent statement. On a recent talk show Dr. Busuttil confessed that he is writing the PN's manifesto and asked the presenter not to ask him for information. Information he said would be made available when election is announced!! So!!!!!

michael catania

Nov 22nd 2012, 11:09

Mr. scicluna Just one piont REMEMBER the promise of tax reduction ,please don't wear an old hat. Talk about present issues.

J. Scicluna

Nov 22nd 2012, 11:12

"The PN's cards are on the table"

Of course they are...FACE DOWN!

The PN's electoral program is also under lock and key. THAT is what Simon Busutil admitted in public.

LP has already confirmed that their program will be published on the same day the PN publish theirs...why this rush? The government has been taking it easy for the past year or so to the detriment of the whole country.

Brian Gatt

Nov 22nd 2012, 11:16

@ Julian Borg.

Pn's cards are on the table...please tell us where and which table cuz Simon Busutill stated clearly that he will not inform us whats in the Electoral manifest before the Election Day is announced.

Julian showing your treu colors (PN LACKEY)

Mario Camilleri

Nov 22nd 2012, 11:48

Julian,
Don't you remember what EFA used to say when asked about his proposals "warbu minn hemm u ngħidulkom x'ser nagħmlu la nkun fil-gvern". Another phrase commonly used in parliament, "Nirrispondi lil onorevoli interpellant li r-risposta nagħtihilu f'seduta oħra" and in the sessions thereafter. On the other hand we ARE NOT yet in an election phase no, or we are? Good if you would tell us!

Vince Deguara

Nov 22nd 2012, 11:48

J. Scicluna

You Certainly are refusing to accept the undeniable...

Julian Borg

Nov 22nd 2012, 13:48

The PN has stated that it will be converting the power station to gas if and when EU finding for a gas pipeline is secured. It has stated that the cost of producing electricity using gas is more expensive but it will do so as it is a cleaner fuel. The PN has also stated that it is likely to take 4 or 5 years before the conversion is completed given manufacturing, funding, tendering etc timeframes.

Julian Borg

Nov 22nd 2012, 13:50

I am a proud Nationalist but will happily criticize my party if it is justified. The PN's track record in employment creation, the economy, education and health is there for all to see. I am sure the PN have plenty more goodies in the pipeline in their manifesto but you will get a good indication of policy and action in the budget speech - as for the MLP we know nothing - nada - nyet!

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