Anthony Valvo has been asked to step down from chairman of ARMS Ltd, fewer than three months after being appointed by the new Labour government. Mr Valvo noted when contacted that his appointment on April 15 had not been on an interim basis.
Asked for the reason behind the Government’s sudden change of plans, Mr Valvo said it was the result of a “strategic decision aimed to improve the company’s efficiency”.
He added that the ARMS board felt it would be in the company’s interest to place it under the chairmanship of the Water Service Corporation.
In fact, Mr Valvo was succeeded at ARMS by WSC chairman Tony Mejlaq at the end of last month.
The decision raised questions about the future of ARMS, especially after Energy Minister Konrad Mizzi announced that the corporation “would take the lead” in its two core operations: the processing of utility bills and the €70 million smart meters project.
However, according to an Energy Ministry spokeswoman, ARMS will not be closed down.
She said reforms would ensure better coordination of resources and the early resolution of the serious debt collection problem.
The ministry said that the billing system was being reviewed to make it more accurate, efficient and customer-friendly while also cutting down the backlog.
The shadow minister for energy, George Pullicino, described the change in chairmanship as “rather strange”. He questioned whether the new management structure tilted the balance in favour of one entity at the expense of Enemalta, saying that this might be the source of future disputes.
However, Mr Valvo allayed such fears, saying that both the Enemalta chairman and its representatives on the ARMS board agreed with the decision.
Speaking in Parliament on June 26 during the WSC financial estimates debate, the Energy Minister said that ARMS accounted for almost all the losses incurred in recent years by the WSC.
He said the company still had to collect €160 million in unpaid bills, of which €11 million dated back more than five years.
It also transpired that there were thousands of cases, technically known as ‘locked accounts’, where bills were not issued for more than a year. This resulted in huge cash flow problems.
The setting up of ARMS in 2009 was intended to address a number of grey areas over the billing and metering systems that frequently caused friction between the corporation and Enemalta.
At the same time, it was also hailed as a reform that would make utility bills customer-friendly and simple to understand. In addition, ARMS was also tasked with the implementation of the smart meters project.
However, reality proved to be completely different as the company not only failed to live up to its task but some aspects became even worse. The introduction of bills based on estimates rather than on actual consumption was probably the most criticised decision.
Meanwhile, the completion of the smart meter project, which began in 2009, has once again been postponed, with the new deadline being set for the end of next year.
This continual postponement, the result of technical problems, means the corporation is still relying on meter readers and that the introduction of night tariffs had to be delayed.