The government's proposed new utility tariffs - which have been criticised by the private sector and which effectively ended electricity and water subsidies to industry - could mean an additional shortfall of $10 million (€7.3 million) annually for ST Microelectronics in Malta, industry sources have told The Times Business. This would be in addition to the company's annual shortfall of $58 million.
The $68 million figure would not be a loss, but a shortfall in the income that ST could make elsewhere from its Malta operations.
ST Malta hit the headlines in early summer as fears grew that the company, which is Malta's largest exporter and which employs some 2,200 workers - would close its Kirkop plant due to rising costs and a tough euro-dollar exchange challenge.
Sources told The Times Business that the increased shortfall was especially worrying when one considers that the current international economic situation has deeply affected the sale of motors - one of ST's main export clients, and a slump in the sale of white goods and electronic equipment was likely to follow.
The Times Business asked Infrastructure Minister Austin Gatt, who is responsible for Enemalta and the Water Services Corporation, whether the government was concerned that the revised utility rates might force ST to consider its Malta plant as not being viable, and whether it was prepared to shelve its proposed revision in the interest of crucial companies such as ST Microelectronics.
Dr Gatt said: "We will not discuss the accounts of Enemalta clients under any circumstances. What I can state is that large consumers are not being hit because of the rise in tariffs but because we are being forced to remove the capping mechanism for reasons that we all know. In fact, the tariff being proposed for large consumers like ST Microelectronics sells electricity to these companies below the cost that Enemalta pays to generate it! So it certainly cannot be said that tariffs are unreasonable in the regard of these companies and I doubt if there is any company in the EU which pries its electricity this way."
He added: "On the question of competitiveness, the proposed tariffs are in line - if not lower - than a number of EU countries. If you are comparing with North African or Far East countries, then it's obviously another matter but then we all know that it is unrealistic to believe that we can achieve those cost levels".
Last year STMicroelectronics closed its three plants in the US and Morocco, however, in July the company's chief operating officer, Alain Dutheil, told the business and financial news service Forves.com that the giant microchip maker had no plans to close down any more factories following those closures.
ST Microelectronics has asked the government for a financial support package running into tens of millions of dollars in order to stay, complaining of the decreasing competitiveness of the Kirkop plant.
The government made a counter offer but there has been no response so far.
The $68 million figure would not be a loss, but a shortfall in the income that ST could make elsewhere from its Malta operations.
ST Malta hit the headlines in early summer as fears grew that the company, which is Malta's largest exporter and which employs some 2,200 workers - would close its Kirkop plant due to rising costs and a tough euro-dollar exchange challenge.
Sources told The Times Business that the increased shortfall was especially worrying when one considers that the current international economic situation has deeply affected the sale of motors - one of ST's main export clients, and a slump in the sale of white goods and electronic equipment was likely to follow.
The Times Business asked Infrastructure Minister Austin Gatt, who is responsible for Enemalta and the Water Services Corporation, whether the government was concerned that the revised utility rates might force ST to consider its Malta plant as not being viable, and whether it was prepared to shelve its proposed revision in the interest of crucial companies such as ST Microelectronics.
Dr Gatt said: "We will not discuss the accounts of Enemalta clients under any circumstances. What I can state is that large consumers are not being hit because of the rise in tariffs but because we are being forced to remove the capping mechanism for reasons that we all know. In fact, the tariff being proposed for large consumers like ST Microelectronics sells electricity to these companies below the cost that Enemalta pays to generate it! So it certainly cannot be said that tariffs are unreasonable in the regard of these companies and I doubt if there is any company in the EU which pries its electricity this way."
He added: "On the question of competitiveness, the proposed tariffs are in line - if not lower - than a number of EU countries. If you are comparing with North African or Far East countries, then it's obviously another matter but then we all know that it is unrealistic to believe that we can achieve those cost levels".
Last year STMicroelectronics closed its three plants in the US and Morocco, however, in July the company's chief operating officer, Alain Dutheil, told the business and financial news service Forves.com that the giant microchip maker had no plans to close down any more factories following those closures.
ST Microelectronics has asked the government for a financial support package running into tens of millions of dollars in order to stay, complaining of the decreasing competitiveness of the Kirkop plant.
The government made a counter offer but there has been no response so far.