Labour MP Charles Buhagiar on Wednesday questioned figures appearing in the Water Services Corporation annual report regarding operational costs for the production of water and revenue from the sale of the resource, saying that these did not add up: depreciation, salaries and electricity tariffs decreased, but revenue still went up.

Corporation chairman Louis Giordimaina had said the EU directive placed the responsibility on the utility to operate without government subsidy for the first time since its inception. The question was how the corporation had now arrived at the situation where it no longer needed government subvention. Its revenue from sale of water, which in three years had more than doubled from €25.2 million in 2006 to €52.3 million in 2009, indicated that the rates had gone through the ceiling.

Some chalked this down to increases in electricity prices, as methods such as reverse osmosis consumed considerable amounts of electricity. In 2006, he said, the WSC had spent €9.4 million on electricity, but in 2009 the sum had risen to €14.5 million. Overall, the expense had increased by around €5 million, but on the other hand, earnings had increased by around €27 million. The increases were not comparable.

Other expenses, Mr Buhagiar said, had also gone down: salaries, one of the corporation's main expenses, had decreased by some €2.5 million, from €24.7 million in 2006 to €22.3 in 2009; depreciation had also decreased rather than increased, from €9.1 million in 2006 to €8.5 million in 2009.

The truth was that other issues had to be factored in, such as making good for waste water, which was included in the directive.

When a Labour government had introduced tariffs on drainage it had been criticised, yet the government was now doing the same thing but by another name.

Unaccounted-for water had decreased to around 41.3 per cent, when it used to stand at more than half that produced, But losses still existed. Trunk mains replacement was one of the ways of tackling this problem, and between 1996 and 1998 the Labour government had replaced more than a 100 km a year.

This water was divided into apparent and real water loss. Real loss amounted to around 18 per cent. Apparent losses, he said, were a result of errors in the system. There was to be a major investment in changing the meters this year, but more could be done to tackle water theft.

There was more than €6.3 million of water produced but not invoiced. Compared to the €52 million in revenue, which covered 59 per cent of the production, the 41.3 per cent which was not billed had to be seen to. Only then could the corporation assess how much it was losing.

Referring to the better use of treated waste water, Mr Buhagiar said that the government did not give enough thought to the locations where the treatment plants were to be built. Between €50 million to €70 million would be spent on the Ta' Bakrat waste water treatment to be built in the south of Malta, which was already fully serviced by the waste water treated at the Sant' Antin plant.

This meant that the corporation would have to dig arterial roads to carry this treated water to other areas. The only other solution was to release this second-class water into the sea when Malta was spending millions to treat seawater in the desalinisation plants.

He asked whether the sewage master plan had been updated to reflect demographic changes over the years. This was supposed to have been finalised by June. He agreed with the aims in the master plan, adding that certain decisions could have been taken without waiting for its publication.

Referring to CEO Mark Muscat's report on storm water, Mr Buhagiar asked whether the Gozo storm water plan was ready. Admittedly, it was difficult to set up a storm water master plan because there was not enough cooperation from the other various entities involved.

Mr Buhagiar criticised the fact that properties were built without underground wells. Mepa should also take action against the illegal house and apartment connections to the sewage system in collecting rainwater from roofs.

Storm water in valleys could be better utilised. Although it was the corporation's responsibility to harvest storm water in valleys, the valleys themselves were not its responsibility. Valleys which were not regularly cleaned from waste had diminished capacity. This resource was being wasted.

Concluding, Mr Buhagiar criticised patching of roads after works carried out by the corporation's workers or its contractors, saying it was enough that trenching works on roads reduced their lifespan by 40 per cent.

Labour MP Alfred Sant said it was shocking how, over the past three or four years, the corporation's dependence on reverse osmosis had remained undiminished at 55 per cent, with the remaining 45 per cent coming from boreholes and pumping stations. This was disquieting because the corporation knew only too well the huge cost difference between one and the other.

The annual report spoke of customer care and service in the long term, as if there was nothing wrong in the current system. Consumers asking for clarification of bills were mostly put in a position of having to accept them. The WSC was treating the Maltese consumer as any monopolist would and this did not augur well.

The corporation's public works were nothing to praise. Works on a very short stretch of Old Church Street in Birkirkara had been ongoing for six to seven weeks and, even more galling, works had been done and undone. The state of the street was dangerous for its many senior inhabitants to navigate. Where was the professionalism?

Speaking about loss of produced water, Dr Sant said the infrastructural leakage index (ILI) was establishing itself as the best method of measuring water loss control. A perusal of the WSC's ILI over the past three years showed unstable variations. It was futile to keep quoting the best months as if they were representative.

How did the claimed "substantial" reduction in water loss compare to that in other countries? Minister Austin Gatt had claimed it would be futile to go below the two mark because of the manpower cost involved. But in circumstances close to Malta's, the ILI in Cyprus was just over one. How could Malta prospect professionalism when it was consciously not going for the best possible results?

Another problem was that the WSC's accounts did not give a timeline for the capital expenditure for this and the next few years. Such a timeline was essential if one was to come up with a credible vision.

Dr Sant said the water situation in Gozo was markedly better than in Malta, with an ILI of 1.5, but the quality of aquifer water was much worse with a high level of salinity, so that a number of boreholes had had to be closed down.

In 1996, the new Labour government had asked for a report on the situation, and within a year had completed the first phase of a project to analyse the infrastructure and eliminate the pollution of three of the most beautiful beaches in Gozo. By comparison, the Nationalist administrations had since spent 10 years trying to get anywhere.

Dr Sant said that where the accounts prospected average water price movements for the next few years they made worrying reading. In 2006, 17.8 million cubic metres of water had been billed at an average €1.42 per cubic metre; in 2007, 18.1 million cubic metres at €1.45; in 2008, 19.5 million cubic metres at €1.73; and for 2009 the average billing price for 17.5 million cubic metres was pegged at €3.23. This meant a 123 per cent rise in the average price per cubic metre of water.

What if the main water source were switched from reverse osmosis to the water table? The prices did not make economic sense, and the opportunity cost concept had been completely lost at a cost to the country. Gozitan farmers were being expected to pay for second-class water when they were using a multitude of illegal boreholes for their agriculture.

It did not make sense to induce mounting costs for second-class water in an industry that was already heavily dependent on enormous subsidies to survive. Of course farmers would continue to pump up water. The only way to stop them would be to give them second-class water for free.

Dr Sant said the corporation's concepts of full production cost recovery and burden sharing fell flat because it was still far from understanding water leakages all over the country. The main problem was that the WSC was working in a vacuum, and could not get to grips with how it could manage water supplies well enough without the use of nice words.

The FAO 2006 report confirmed that the state of Malta's water resources was poor and needed improved integral and dynamic governance.

The truth was that the government was still far from solving the corporation's major problems, such as storage, second-class water and better consumption. It must think of priorities, such as the resources problems that had not really been faced up to.

Labour MP Silvio Parnis said the government had to understand what people were going through as a result of the economic recession. Instead, the government had given them a shock with the utility tariffs.

Subsidies needed to be more generous and just. What would happen to hoteliers and their several employees if the hotel subsidy was removed?

The country also needed to address climate change.

Noel Farrugia (PL) said that while tap water had improved, underground water had deteriorated. While speaking about efficiency, Malta exceeded the EU directive on the level of nitrates. There was still no planning on the issue and in certain areas, natural water was still undrinkable.

During the 1996-98 Labour administration, works had been undertaken on evaluation for production of tap and aquifer water supplies. There had been a strategy to use the most sustainable method to collect natural water.

He claimed that certain areas in Rabat were receiving contaminated water. In other areas such as Għajn Tuffieha, Mġarr and Mellieħa there were higher levels of nitrates than those stipulated by the EU directive.

With regard to rainwater, it was only the NSO that had confirmed that in certain aquifers nitrate levels exceeded six times more than those stipulated by the EU directive.

Mr Farrugia said until government kept denying mistakes, it would simply mean a greater tax burden on consumers.

Social Policy Minister John Dalli said that the water issue was vital as even climate change was going to affect its provision.

Throughout the years, water consumption was heavily abused since many irresponsible people chose to access the resource with the least possible expense.

There should be efforts to maximize the collection and use of storm water. One should ensure that second-class water was utilised. Meanwhile, streets should be planned to enhance water management. It was a pity that certain second-class water ended up in the sea.

Mr Dalli also referred to ultra purification, which removes all viruses and germs that makes it better for watering and safer for human contact. He said that the energy needed to reach this purification was around 40 per cent less costly than desalinating seawater.

Turning to waste control, he said that in the past, around 4,000 cubic metres per hour were lost due to leakages. It had now been reduced to 600 cubic metres per hour. This was positive since there would be less need for reverse osmosis plants and energy consumption.

The corporation should also consider other wastages, like damaged pipes, faulty water meters and theft.

Minister Dalli reiterated the need for higher responsibility to ensure that this vital resources should be safeguarded, improved and taken care of.

Ċensu Galea (PN) said that over the years there had been a heavy investment in the infrastructure network that had ensured continuous water provision. Having achieved this, the corporation was now focusing on the production of better-quality water which was now at its best ever.

The production of treated waste water, adequate for agricultural use, was to be studied well to ensure that this production reflected demand and at an adequate standard for agricultural products. The re-diversion of such treated water to agricultural areas would also require an investment in adequate infrastructure, and it might be necessary to address the needs of land which was now considered barren.

Mr Galea said that monitoring the use of underground water must be carried out without causing difficulties to farmers. The reduction of water available to farmers would increase the cost of agricultural produce. Moreover, the situation of farmers must be distinguished and regulated differently from that of those who drew underground water to sell to others.

The new waste water treatment plant, together with the plants in Gozo and Mellieħa, meant that all waste water would be treated.

He called on the corporation to ensure that its drainage mains in the areas of Marsascala, St Paul's Bay and Buġibba be enabled to cater for increased capacity due to the expected increase in population density in summer.