The revised water and electricity rates make Malta's tariffs the highest in Europe and will result in a 49 per cent increase for businesses, according to the director general of the Chamber of Small and Medium Enterprise - GRTU, Vince Farrugia.
To add insult to injury, he told a press conference yesterday, businesses would also incur an extra cost of between 16 and 25 per cent for water once the new rates come into force on January1.
Mr Farrugia said such high tariffs, announced a week ago, would force many businesses to raise prices, lay off workers or even shut down, adding that the GRTU would support any action at the level of the Malta Council for Economic and Social Development that demonstrated solid objections to these tariffs.
According to GRTU studies, about 42,000 business accounts would have to fork out an extra €36.35 million next year to cover the utility rates' hike.
Contrary to what the Prime Minister had said, the new tariffs were substantially higher than the tariffs rashly imposed in October 2008, Mr Farrugia insisted.
The new tariffs were the direct result of 20 years of inefficiencies of Enemalta and the government's failure to adopt policies to address them. He said Enemalta could get away with increasing its tariffs haphazardly because it had a monopoly and was the only energy provider in the country, giving consumers no alternative.
He said the GRTU had no confidence in the board of the Malta Resources Authority and it should either explain its decisions or resign. The same, he said, applied to Enemalta's Fuel Procurement Advisory Committee, responsible for oil purchases.
Mr Farrugia insisted the EU Electricity Directive obliged the MRA, as the regulator, to safeguard the interests of small businesses. Not only did it fail to do this, he added, but, for the second time in two years, it did not consult any stakeholder on the matter. That was absolutely unacceptable.
According to the GRTU's workings, 37,000 of the 42,000 non-residential accounts would see an increase of between 41 and 56 per cent, with the lowest increase being experienced by those who used between 10,000 and 20,000 units a year.
Mr Farrugia said the MCESD had to be given the facility to investigate the findings of the MRA in order to ensure it had fulfilled its regulatory role and was not simply rubber-stamping. There should also be an MCESD representative on the Fuel Procurement Advisory Committee.
Should the MCESD find that increases accounted for more than 20 per cent, a bank guarantee support fund should be established to support SMEs for payment of the tariffs, he said.
"The GRTU is not an organisation that participates in political crusades but when the system of consultation collapses, representative bodies will be forced to take action beyond the realm of social dialogue," he said, echoing the united voice of social partners who have, over the past days, requested an urgent MCESD meeting to discuss the tariffs.
He said the micro-credit support scheme announced in the Budget 2010 and the €2.5 million fund to assist businesses, also announced in the Budget, had to be implemented immediately.
In the meantime, the GRTU is setting up an advisory service to help enterprises obtain access to new finances, mitigate dismissal of employees or eventual closure.
Meanwhile, the opposition utilities' spokesman, Joe Mizzi, filed a judicial letter contesting the MRA's decisions on the new water and electricity tariffs.
He expressed doubts over the way the MRA had acted in justifying the increases. "More than being a regulator, the MRA acted like a rubber stamp in raising the rates when oil prices have gone down," Mr Mizzi said.
He pointed out that other court action he took against the MRA and the Fair Trading Department were still pending.
Labour leader Joseph Muscat said on Sunday that Enemalta's requests to the MRA were inflated by at least €5 million.