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Scepticism on energy plan timeframes 'understandable' - Muscat

Labour leader Joseph Muscat said this morning that scepticism expressed by some quarters on the timeframes for Labour's energy plan was understandable because the country had become accustomed to mediocrity. 

Speaking at a PL business breakfast, Dr Muscat defended the timeframes however - including the commissioning of a new gas-fired power station within two years - saying that in the same way that the present government fast-tracked some permits and changed local plans, there would be political commitment for the timeframes to be observed.

Dr Muscat announced that a new Labour government would have a minister responsible for energy.

During the same activity, Labour candidate Konrad Mizzi, who unveiled the plan yesterday, said an international call for tender would be issued in April, followed by a month-long road show, and procurement would be completed in five months.

Dr Muscat said that the present government's arrangements regarding the Special Purpose Vehicle to pay off some of Enemalta's debts would be respected.

He also said that Labour would shortly be unveiling more energy proposals, including renewable energy. He said families would continue to be encouraged to invest in renewable energy.

Earlier in the activity, Mr Mizzi said that retaining the status quo in the energy sector would have seen Enemalta becoming another dockyard.

Mr Mizzi said the party took a prudent approach to make energy tariffs sustainable and help businesses become competitive.

Under Labour's plan, the unit cost of electricity would come down to  9c6 from the present 18c, which would include a return on capital and a profit margin.

The PL would build a terminal rather than invest in a pipeline which would cost €140 million. This would enable it to buy gas from all over Europe.

Labour would also build a new gas power station in Delimara which would have a better efficiency rate. The tall chimney at Delimara would be removed by 2015.

Mr Mizzi said that the required €376 million investment would be partly financed by the private sector without the need to privatise Enemalta, which would be buying electricity.

The PL government would issue an expression of interest in April and plan a series of road shows. It would hit the ground running because it knew there was a lot of interest in the proposal.

Mr Mizzi said that €77 million would be invested to reduce tariffs and €110 million would be used to bring Enemalta back on its feet. Businesses would also see a reduction of around 25 per cent in their tariffs.

With more than €17 million in energy being used to produce water, water tariffs will be reduced by 5 per cent and the rest of the savings to renew water table.

The plan was to drop tariffs for businesses within one year after the reduction for residential clients in March 2014.

Dr Muscat said this roadmap was credible and doable and the studies had been carried out by foreign consultants.

It had a social element because it would be helping families and a competitive element because businesses would also see their tariffs sliced.

Dr Muscat said that introducing new taxes to finance this would be like robbing Peter to pay Paul so this was out of the question.

This, he said, was a golden opportunity for the private sector in Malta which would open new avenues for private companies.

“We are excluding privatisation of the state energy provider and we will protect the jobs there,” he said adding that the technology Labour was proposing was tried and tested.

Labour, Dr Muscat said, was pleased that the government was thinking on the same lines but the difference was that it had had 25 years to do it.

“We are encouraged with the interest shown in the proposal both locally and internationally.”

Replying to criticism on over investment, Dr Muscat said the party did not believe there was over investment. It was planning ahead.

If things did not change, tariffs would have to increase and even the European Commission has confirmed this.

The business breakfast is still under way with a question and answer session taking place soon.

Replying to a question by hydrologist Marco Cremona, Dr Muscat said a tax on sewerage was 'not on the cards'.

Dr Muscat also said in reply to another question that under Labour, Enemalta's management would be bipartisan. Directors would be chosen on the basis of their merit, whatever their party, he said. 

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