Resource Minister George Pullicino said that although the new utility tariffs were based on long-term requirements of the nation, the government finances had also to be safeguarded.

Speaking in Parliament on the opposition motion which termed the tariffs "socially unjust", Mr Pullicino said that many of the recommendations put forward by Opposition Whip Joe Mizzi were already being implemented.

The motion was defeated by 33 votes against and 31 in favour after a division.

Development of the internal market of the EU, climate change and the fluctuation of oil availability led to various opportunities for investment. The climate change report calculated that Enemalta would be investing around €1,210 million.

Mr Pullicino said Enemalta and the Malta Resource Authority were studying issues such as the submarine cable, wind farms and climate change. Enemalta was doing a great deal to improve the situation, such as purchasing a new plant.

The KPMG report clearly stated that the MRA had immediately started working on the analysis of tariffs with Enemalta and Deloitte. The conclusion which was the basis for tariffs had been reached on December 7, 2008, and the unions had gone to the MRA on December 22.

Mr Mizzi had made serious allegations that the parties concerned had hidden information, to stop competitors from entering the water market. This was not true. The fact that Malta was in no way obliged to liberalise the electricity market proved how ill-informed the opposition was. Malta was exempted from having a competitive market by the Commission, because of its size and market. It was shocking that the Opposition Leader and whip were not aware of this fact.

The government and Enemalta were working on a plan based on the policy followed by the EU. This plan would be published by the end of the month.

Turning to the 2015 targets, that 10 per cent of energy must come from alternative sources, the minister said a variance of just 0.05 per cent from the target would cost Malta €45 million.

The government would soon start delivering vouchers for energy-saving bulbs to residences, in a bid to change people's mentalities.

Carmelo Abela (PL) said that during the last year the deficit had been four times more than projected. Like the government, Enemalta was also administered badly while wrong decisions had been taken in the energy sector.

For political convenience the PN government had levied a 50 per cent surcharge on energy bills, despite the fact that oil prices had risen. But towards the end of last year, in the midst of an international economic crisis, the government had decided to raise the surcharge drastically.

The country's competitiveness had suffered, as could be supported by statistics, and this could also have resulted in job losses. Transport expenses also contributed to erode Malta's economic competitiveness.

Justyne Caruana (PL) referred to what Minister Dalli had said about the government's finances having to be safeguarded, and suggested the government lead by example. It was not responsible, in the current situation, to give ministers, for example, honoraria as members of Parliament over and above their ministerial salaries.

She said people had a right to protection, which only the opposition could offer. A 2005 report showed that there were 60,000 people living in poverty as were 21 per cent of children. This was at a time when there was no crisis. The government now had to assess the impact of its decisions.

The authorities were dragging their feet too much. The opposition was working with conviction, and the matter would not stop here.

Labour Deputy Leader Anġlu Farrugia said the new utility rates breached four local pieces of legislation. The government was disregarding EU directives, European Court decisions and local legislation. The European Parliament and the European courts had defined what constituted an "excessive price"; the price had to consider economic reasoning and product value.

The tariffs were illegal because they had not been approved by the Malta Resource Authority, which should have seen that the tariffs did not breach the Enemalta Act and that the rates took into account vulnerable consumers.

Dr Farrugia also claimed that the tariffs were in breach of the Fair Competition Act because the corporation was abusing its monopolistic position in the market to hide its inefficiencies. Protests had been lodged in court and with the Office of Fair Competition.

The government did not have a social conscience but was stifling consumer rights emanating from laws protecting the consumer. Justice could only be done if the three legal notices mentioned in the opposition motion were revoked.

Opposition spokesman on utilities Marlene Pullicino said that the government had introduced the revised utility rates when it knew that the world was in the grips of a global crisis, without consulting either the opposition or the unions. In November, the Federation of Industry had warned the government that it was concerned the utility rates would lead to a lot of uncertainty.

Concluding, Dr Pullicino called for an energy investment programme.

Labour MP Charles Mangion said the new utility rates were not justified in the present economic scenario and sliding oil prices. Alternative energy and 2015 targets were not an issue because everyone agreed on them, but the government would do well to look at Germany and Spain and adopt parts of their models.

The first year of this PN administration was full of controversies, of which the utility tariffs issue was the most serious. Mr Pullicino had said that the government must ensure sustainability of its finances. Were the finances not as sound as claimed before the election?

The tariffs were not justified in the face of the economic results achieved in 2008: less exports, less investment and less importation of industrial and capital goods. The writing was on the wall for the government to see.

The government claimed 2008 was the best year in tourism when guest nights, at 11.2 million, were less than those of 1998.

Malta had a record inflation rate of around five per cent, and such utility rates simply continued to erode Malta's competitiveness and increase instability.

The regulator was not there to ensure that the government bridged its budget deficit, but in a state monopoly it must safeguard the consumer while seeing that Enemalta was efficient.

Dr Mangion said that the government must revise the rates downward by 30 per cent or more; see that Enemalta was efficient; ensure that the corporation lived up to its public service obligation and tackle the main problem, that of payback on investment in alternative energy sources by both households and industry.

Factbox

It took 33 minutes and 20 seconds for Opposition Whip Joe Mizzi to introduce his 18-page motion asking the House to revoke three legal notices on the utility tariffs. This led Mr Speaker, Louis Galea to comment that this was a record.

Twelve members of the House took part in the five hours of debate, spread over two sittings. Apart from Prime Minister Lawrence Gonzi, three ministers spoke on behalf of the government while eight spoke from the Labour side, including Opposition Leader Joseph Muscat.

When the vote was called, five members were absent: Robert Arrigo and Beppe Fenech Adami for the PN and Chris Cardona, Marie Louise Coleiro Preca and Joe Sammut for the PL.