Consumers who paid water and electricity bills on the basis of estimates which were higher than the actual consumption would be paid interest of six per cent on the difference.

Speaking during a debate on an opposition motion or Arms Ltd, Finance Minister Tonio Fenech said the new system would be introduced as soon as changes to the billing system were complete.

He said that as from January 1, Arms Ltd was committing itself to issue all bills at two-month intervals.

Furthermore, the deposit of €466 on the transfer of accounts of deceased account holders onto their children was being removed.

Referring to interest of six per cent on overdue bill settlement, Mr Fenech said that it was true that people who had not been billed for months could not be expected to pay up immediately, and a 120-day grace period was therefore being given. But anything beyond that involved a cost for Enemalta because of lower turnover, and punished those people who paid regularly.

However, he said, people with outstanding payments would also be encouraged to settle by instalments, with a two per cent discount on the payments made by direct debit.

The government would also remove the installation fee when meters were installed for photovoltaic systems.

Mr Fenech was speaking during the debate on a motion by the opposition demanding an investigation by the Auditor General into Arms Ltd. He said the government wanted a system that was efficient, effective and customer friendly.

There was no doubt that these desired levels had not been achieved. This did not mean that the Arms Ltd personnel had not done the best they could, but ultimately up to some time ago, people were made to wait hours in queues and were not given a good service. The Prime Minister had apologised for what had taken place, and measures were taken to remedy the situation.

The new billing system was not a complete failure, Mr Fenech said but some areas had failed, such as customer care.

Before blaming the project team, one needed to see the whole situation and it was good that the Auditor General would review the company’s operations.

Mr Fenech said the contract with IBM for the smart meters could not be tabled, despite the opposition’s requests, because of commercial reasons since it was still being implemented, the minister said. The Auditor General could see it, however.

Reacting to comments by Jesmond Mugliett, the minister said the old billing system had many more serious problems, not least because the software was written in old language which no one could understand except for one retired person.

It was also worth keeping in mind that the transition to the new billing system had coincided with the granting of the energy benefit. Unfortunately, some address changes which were inputted for the energy benefit had not been retained by the system. The end result was long queues and many disappointed people over a period of four months.

The setting up of Arms itself was logical. Billing was formerly handled by WSC when 90 per cent of the billing amounts applied to Enemalta, which wanted a greater say in the process.

Mr Fenech also defended the decision to deploy smart meters, since this instilled greater transparency and cut down abuse. The smart meters would eventually return a saving of €23 million per year. This was the opportunity cost which Mr Mugliett should have seen.

Mr Fenech said that some 32,000 smart meters have been installed so far out of a total of 245,000. Readings efficiency was 98 per cent. In Mdina, a milestone had been reached with 53 bills having been issued solely on the basis of the data from the smart meters.

Mr Fenech said some people had not received a bill for months because the system might have detected an abnormality and the bill had to be manually checked before being mailed.

Mr Fenech insisted that parallel testing had been made on both systems.

Referring to criticism by the opposition over the weekend, Mr Fenech denied that after some consumers were wrongly billed for their meter rental, somebody decided that only those who complained should be refunded.

At this stage Mr Fenech tabled an exchange of e-mails between the staff of Arms Ltd and the IBM technicians running the system. He said that Mark Lupi of Arms Ltd, at the end of the exchange, decided that the bills would be checked manually and rather than revising the old bills, corrections would be made from the date of issue of the last bill and the system would be automatically adjusted.

To do otherwise would have been too cumbersome, Mr Fenech said. However, if somebody complained on the counter, the change would be made immediately.

Mr Fenech said that the people calling at Arms to complain peaked at 7,000 in July, with August and September at similar levels, but that subsided to 4,000 in October and was continuing to go down. Waiting time had been three hours in some cases in summer but the August average was 1.29 hours.

After new measures were introduced this had been reduced to the current average of 30 minutes.

Mr Fenech admitted that there had been a bug in the system and some changes made to people’s accounts had not been retained, however, this had now been fixed. Changes had also been made to reduce the backlog of e-mails and have a more efficient service over the phone.

There were also more people on the front desk and fast track lanes had been introduced for people with minor problems.

Mr Fenech said that 55 had applied to fill the post of CEO of Arms Ltd but only one had the skills sets which Arms Ltd required.

He, however, requested a salary of €150,000 which was unacceptable. Therefore the government looked internally and identified Wilfred Borg from Air Malta as suitable for this post in view of his experience.