Private sector is key part of PL utility rates pledge
A Labour Party pledge to reduce utility bills will be based on the involvement of the private sector in electricity generation, The Sunday Times has learnt.
The energy plan will include the elimination of heavy fuel oil and the conversion of the Delimara power station to run on gas.
Details will be unveiled this week. The plan would lay out in detail the “significant” cost savings families and businesses will make, sources said.
The plan will for the first time cater forthe generation of electricity by a private operator apart from Enemalta, the State energy company. This means that any capital expenditure required to shift to gas will not be undertaken by Enemalta, which is laden with debt.
Sources said the party had been working on this plan for months and took a leaf out of what happened in the rest of Europe where private companies were involved in electricity generation.
However, they insisted that the State company will not be privatised and the PL is expected to guarantee the jobs of Enemalta employees. Set up in 1977, Enemalta employs almost 1,500 staff.
Reducing utility bills is crucial to the PL’s pledge to stimulate economic growth by cutting costs for industry and has been a central argument in recent years – with Labour coming under fire for failing to flesh out its pledge.
The plan will also have to stand up for scrutiny at the hands of credit rating agencies. In September last year ratings agency Standard and Poor’s kept Enemalta’s rating of B+ after downgrading the corporation in February.
The outlook was still negative and the decision to keep the same rating was based on the opinion that there was a high likelihood that the Maltese Government would provide timely and sufficient extraordinary support to the company in the event of financial distress.
Electricity generation is currently dependent on heavy fuel oil and will only diversify when the interconnector cable with Sicily is in place.
Through the cable Enemalta will be able to buy electricity from mainland Europe to make up for the loss of generation when the Marsa power station closes down completely.
The Labour plan is expected to factor in the interconnector cable.