The rate of mistakes in the migration of water and electricity bills to the new system between January and October was 5.3 per cent, Infrastructure Minister Austin Gatt told Parliament. The problem was not Arms but the system.
The government was not negating the problem or the need for the Auditor General to investigate. What were being contested were not the facts, but rather the contention that the problems had occurred because Arms had been set up.
Unaccounted-for losses meant that meters were not working (there were 250,000 meters and 16 meter readers), that they were under-registering or that the supply was being tampered with. This amounted to seven per cent of billing or €23 million, which would have to be paid for by the rest of the community. The government wanted meters that could not be tampered with or, if not working properly, would be picked out by the smart grid. This was a three-year project which had been started only nine months ago.
The €65-million-cost of meters and billing system was expected to be recouped in three years. The €23 million of non-technical losses would also be recouped, while estimated bills would be killed forever with full transparency.
Consumers could access their smart meters manually or through a mobile phone, checking on what they were using per hour. Differential tariffs could be set up by day, night, type of electricity, household, business or industrial heavy user. There would be no more meter readers because consumption could be read offline.
Dr Gatt said that if somebody persisted in not paying their bills, supplies could also be suspended offline. The system would give the possibility of cutting high amperage but leaving low amperage for basic services. All literature regarding emission reduction said it could be controlled only through smart grids.
He said it was obvious both sides were in agreement on smart meters. Having come that far, they should see how the smart meter saga had developed.
A contract notice throughout the EU in November 2005 had yielded eight expressions of interest, out of which seven consortia had been identified. After a subsequent request for proposals in 2006 only one company, IBM, had gone forward and designed and certified the custom software. It had then sub-contracted SAB, a German company and the biggest utility software provider in Europe. This meant that the government had two companies of world repute on board.
The two other sub-contractors in the team were Enel and Skada, with which Enemalta and Water Services Corporations had been working for years.
Having one tenderer gave restricted room for manoeuvre, so the government had asked Price WaterhouseCoopers to advise on cost. The company had concluded that the price, brought down from the original €155 million to €85 million, was fair and reasonable. The cost benefit analysis had also been agreed, benchmarked with utility systems in other countries and recommended.
Dr Gatt said it was difficult to fault the government on the process.
The installation of the process had undoubtedly had problems. All must appreciate that a system designed in the 1970s had had to be changed to a totally-new and modern one. In December 2009, the database had been transferred from the old to the new system, and there had seemed to be no problems throughout January. With 80,000 bills migrated, the process of validation of data and bills had been kept ongoing from February onwards.
Arms had contracted KPMG to validate the process, which had not started being used before the validation was forthcoming.
Between January and October, Arms had issued 889,117 bills, of which 47,841 were reversed for a failure rate of 5.3 per cent.
Dr Gatt pointed out that most of the call-centre people who had worked for Enemalta and Water Services Corporations were still there. The only new people at Arms were four executives, but it was not fair to put the blame on them. The problem lay somewhere in the software and input, not in the people.
In 2009, the average issue had been of 66,000 bills per month, which had now gone up to 80,000. It was unfortunate that not all errors had been detected. But, Dr Gatt said, he had full faith in the people working on a not-easy process with five per cent error. IT was made up of complicated processes from which a level of error could result.
The top Maltese working with IBM was a representative of Mita who had proved himself well over the years, and who enjoyed the full confidence of both the government and the opposition.
Concluding, Dr Gatt said Arms had been right to apologise to the public for less-than-ideal inter-facing. But it was also wrong for anybody to make political mileage where they should not. Technical problems must not be used, but worked on for the people’s ultimate benefit.
Earlier, Opposition spokesman on utilities Marlene Pullicino said that everyone agreed there should be a flexible system of payment. The greatest problems were the non-collection of 23 per cent of non-technical losses and the resort to too many estimate bills.
Up to 18 or 24 months ago there was still talk of Smart meters, of which 90,000 were now standing on shelves at a huge outlay of public funds. Had the consumer been better served with real-time readings? The previous two-monthly bills used to help families and businesses pay their dues without so many shocks.
The consumer had not benefited in the year since Arms had been set up, with bills being wrong in more ways than one. Since the people working at Arms came from Enemalta and Water Services Corporations, things pointed to the software. One would have expected the right systems to be installed earlier.
Dr Pullicino said all should be in agreement that there should be an investigation. The whole system could well have collapsed if it had not been for the front line facing the people.
Michael Farrugia (PL) said the government now seemed to be accepting that the present situation at Arms constituted a burden on the people. Dr Gatt had not mentioned the complaints on the non-receipt of energy benefits. When would they be received?
Noting that the government was not contesting the need for the Auditor General to investigate the way Arms was functioning, he said that in the motion the opposition was deploring the insensitivity of Arms towards old, infirm, mobility-impaired or disabled people who now had to catch two buses to get to Luqa, but the government was sweeping such insensitivity under the carpet.
On the second part of the motion Dr Gatt had given a full explanation on how things had developed. So if everything had been done well, there was no reason why the AG should not go in to investigate.
On the third part, Dr Farrugia said that having the Auditor’s eventual report discussed in the House Public Accounts Committee would only mean restaging the recent saga seeking to stop discussion of the BWSC contract for the extension of the power station. A plenary debate in the House would give the report a full airing. Concluding, Dr Farrugia said the opposition’s motion reflected the people’s feelings, but the government’s proposed amendments thereto showed it was riding roughshod over those feelings.
Silvio Parnis (PL) said it was not in the government’s interest to safeguard the consumer, the more so after next year it would be stopping the subsidy to make good for utility prices hikes.
There were families who had been waiting for their utility bills since November last year. But then, some of them last week received three bills at one go. He recalled that some voucher beneficiaries had received the vouchers after they had paid their bills, only to be told that those vouchers could no longer be redeemed.
There have been instances where residences with a single phase meter had been asked to pay for a three-phase meter. Legal letters have been sent to relapsers when Arms Ltd did not have a legal office.
He said that the opposition, which does not want to be an accomplice to this state of affairs, demands that things change for the better.
The rest of the debate will be carried tomorrow.