The country could not continue subsidising industry's water and electricity although it could help it invest in energy conservation methods, Prime Minister Lawrence Gonzi said this morning.

The water and electricity tariffs were the main topic discussed in a dialogue meeting in Victoria, which also included the participation of Infrastructure Minister Austin Gatt and Finance Minister Tonio Fenech.

Dr Gatt said that the people had been subsidising 120 enterprises and hotels for the past three years, paying 95 per cent instead of 75 per cent surcharge.

While electricity production cost Enemalta 18c per unit cost, industry was getting it at 8c per unit. Such operational subsidies could not continue. Industry could instead be assisted to invest in photo voltaic panels, night metres and power factor generation methods, for example.

Mr Fenech pointed out that because the situation turned out to be worse than predicted by the government, Enemalta had to be subsidised to the €68 million, instead of the €24 million allocated in the last budget.

He said the way forward was investment in energy conservation methods and the government was studying how it could encourage this in the forthcoming budget.

Although the government would retain its social conscience and help those families in need, no one could expect not to pay for what he was consuming.

Dr Gatt said that Enemalta last year received more subsidies that the shipyards ever did in a single year. But in spite of this and the surcharge, it still made losses and had to borrow €150 million to buy oil and pay wages. This could not continue and the problem had to be faced. Moreover, an investment of €260 million was needed at Enemalta and the government would be irresponsible not to carry it out.